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Investment income lifts Medibank FY profit

Simone Ziaziaris  |  25 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Medibank Private (ASX: MPL) has lifted its full-year profit 7.6 per cent to $449.5 million, helped by returns from investment income and a lift in health insurance premium revenue.

Health insurance premium revenue for the year to June 30 rose 1.2 per cent to $6.24 billion, despite a slowdown in industry volume growth, while total income from operations was 2 per cent higher at $6.95 billion.

Net investment income doubled to $139.3 million, more than offsetting a lower operating profit for the health insurance business, which fell to $497.5 million, from $510.7 million a year ago.

The division, which operates a single health fund through its two brands Medibank and ahm, contributed 92 per cent to overall revenue and 93.3 per cent of segment operating profit.

Driving the fall were higher management expenses from investment in customer-focused initiatives and IT system amortisation, Medibank said on Friday.

Chief executive Craig Drummond said the company had overhauled its service standards, making significant improvements to its customer services division, launched new products, and worked to provide increased value to customers.

"Affordability for customers has been a real focus for us, with household budgets under increasing pressure," Mr Drummond said.

"The challenge is to get the balance right between meeting the rising costs of healthcare in Australia and ensuring that our products remain affordable while meeting the health needs of our customers."

He said the company's premium charge was at its lowest level in 15 years and 24 basis points below the industry average.

PREMIUM BOOSTS MEDIBANK PROFIT

* Net profit up 7.6pct to $449.5m

* Revenue up 0.8pct to $6.8bn

* Fully-franked final dividend of 6.75cps, up 0.75 cents

 

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