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Medibank profit slips 1pc to $445m

AAP  |  24 Aug 2018Text size  Decrease  Increase  |  
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Medibank Private has posted a one per cent drop in full-year profit to $445.1 million as investment income declined while it improved margins in its core health insurance business.

Health insurance premium revenue for the year to June 30 rose 1.2 per cent to $6.32 billion as a result of premium rate rises.

The average revenue per policy increased by 1.9 per cent for the year.

"Our customer base remained stable at 3.74 million, in a market which saw industry growth continuing to slow," Medibank said in a report to investors.

It saw a slight improvement in group market share in the second half of 2017/18.
Medibank's market share was 26.9% as at 30 June 2018.

Chief executive Craig Drummond said the full-year results demonstrated the core health insurance business is back on track.

He also said the company is close to acquiring an in-home health care business worth an estimated $70 million.

"This is an opportunity to add scale and capability to our in home offering, through a national in-home care business with clinical experience and capability," he said.

The Medibank at home division expects to more than double its customers from 936 to 2000 in 2018/19, not including an estimation from the at home business nearing acquisition.

The health insurance company said it delivered on its cost savings target of $20 million, and has now increased its three-year target by $10 million to $60 million, chasing another $40 million in 2018/19 and 2019/20.

Looking ahead Mr Drummond said the outlook for the private health insurance market was flat for 2018/18 and while Medibank aimed to lift market share the company is also facing higher expenses.

Medibank's shares were down 3.79 per cent to $3.05 at 1139 AEST.

Performance highlights

  • Net profit down 1pct to $445.1m
  • Revenue up 1.2pct to $7.01b
  • Fully-franked final dividend of 7.2cps, up from 6.75 cents

 

 

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