ECONOMIC PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED 30 JUNE 2010
Economic profit or loss is an amount earned for a period by a business after deducting the operating expenses and a charge of opportunity cost of capital employed. The economic profit and loss statement set out in Table 1 is disclosed on a voluntary basis.
The assumptions used in computing the economic profit/loss are set out below:
(i) The cost of equity is calculated based on the following formula:
Cost of equity = (Beta x Market Risk Premium) + Risk Free Rate
(ii) The Beta used in the calculation is the 5 years adjusted Bloomberg Rate:
Quarterly Period Beta
2nd Quarter 2010=1.398
1st Quarter 2010=1.396
4th Quarter 2009=1.417
(iii)The risk free rate is the rate of return of a 10-year Malaysian Government Securities at the closing of the reporting period:
Risk Free Rate
At 30 June 2010=3.910%
At 31 March 2010=4.160%
At 31 December 2009=4.250%
(iv) The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.
This announcement is dated 26 August 2010.
Table 1 |
30 June 2010 (Unaudited)
RM’000
|
30 June 2009 (Unaudited)
RM’000
|
Group profit after taxation |
92,701
|
22,233
|
Less: Cost of capital employed |
(28,404)
|
(29,440)
|
Economic profit/(loss) |
64,297
|
(7,207)
|