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Malaysia Building Society Berhad Economic Profit And Loss Statement For The Financial Year Ended 31 December 2006
BackJun 29, 2007
The Company would like to announce the economic profit and loss statement for the financial year ended 31 December 2006.
Economic profit or loss is amount earned for a period by a business after deducting the operating expenses and a charge for the opportunity cost of capital employed. The economic profit and loss statement set out below is disclosed on a voluntary basis.
ECONOMIC PROFIT AND LOSS STATEMENT
 |
For the financial year ended 31 December 2006
RM'000 |
For the financial year ended 31 December 2005
RM'000 |
| Profit after taxation of the Group | 40,182 | 38,786 |
| Less: Cost of capital employed | (41,983) | (38,526) |
| Economic profit/(loss) | (1,801) | 260 |
The assumptions used in the computing the above economic loss is as follows:
1. The cost of equity is calculated based on the following formula:
Cost of Equity = (Beta x Market Risk Premium) + Risk Free Rate
2. The Beta used in the computation is the 5-year adjusted Bloomberg Beta as follows:
|
For the financial year ended 31 December 2006
|
For the financial year ended 31 December 2005
|
| Beta |
1.33
|
1.2
|
3. The risk free rate is the rate of return of a 10-year Malaysian Government Securities ("MGS") at the closing of the reporting period as follows:
|
For the financial year ended 31 December 2006
|
For the financial year ended 31 December 2005
|
| Risk free rate |
3.77
|
4.5
|
4. The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.
5. Total equity is based on the average as at the beginning and end of the reporting period as follows:
|
For the financial year ended 31 December 2006
RM'000 |
For the financial year ended 31 December 2005
RM'000 |
| Average equity |
392,875
|
358,712
|
This announcement is dated 29 June 2007.
