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nib expects earnings growth to ease

Trevor Chappell  |  21 Aug 2017Text size  Decrease  Increase  |  

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MELBOURNE - [AAP] Health insurer nib (ASX: NHF) expects earnings growth in the 2017/18 financial year to ease after lifting 2016/17 profit by 29 per cent to $119.6 million and generating revenue of more than $2 billion for the first time.

nib's 2016/17 reported profit for the year to June 30 was up from $92.9 million, helped by an increase in policyholder numbers and lower-than-expected claims expense.

Managing director Mark Fitzgibbon says margins within the company's Australian health insurance business are expected to contract and the company will invest in new ventures and technology.

"The outlook for claims inflation and premium pricing as well as the investments we're making in long-term growth across the group means in FY18 we don't anticipate earnings accretion like we've become accustomed," Mr Fitzgibbon said in a statement on Monday.

"Most likely our profitability within arhi (Australian Residents Health Insurance) will return to being within our target net margin range of 5 per cent to 6 per cent."

The company expects underlying operating profit to be slightly lower in fiscal 2018 at $150 million, down from $153.7 million in fiscal 2017.

nib expects a statutory operating profit of at least $141 million in the current financial year, down from $150.6 million last financial year.

The company's shares were 39 cents, or 6.45 per cent, lower at $5.66 at 1030 AEST.

NIB ANNUAL PROFIT UP 29PCT

* Reported net profit up 29pct to $119.6m

* Revenue up 8pct to $2.04bn

* Final dividend up 1.5 cents to 10.5 cents, fully franked

 

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