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Medibank H1 profit up 6pc to $246m

Simone Ziaziaris  |  16 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Medibank Private (ASX: MPL) has lifted half-year profit nearly six per cent, but cost pressures on consumers have kept growth in health insurance premium revenue to less than two per cent.

The health insurer booked a $245.6 million profit in the six months to December 31, thanks to improved operating profit in health Insurance and Medibank Health businesses offsetting lower earnings from investments.

Health insurance premium revenue grew 1.8 per cent to $3.2 billion in the six months to December 31 amid slow uptake in cover industry-wide due to cost pressures on consumers.

Operating profit lifted four per cent on the previous corresponding half-year to $243.5 million.

Medibank said new products and improved customer service had, however, driven an improvement in its acquisition of new customers.

Medibank Health revenue rose by 4.5 per cent to $291.9 million and operating profit in the division lifted 46 per cent to $25.2 million thanks to an improvement in performance across all businesses, including the recently acquired HealthStrong business which provides health services to age-care facilities.

But net investment income--earnings from assets--fell 22 per cent to $59.7 million due to a lower returns, Medibank said on Friday.

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Despite the fall, overall revenue from ordinary activities rose 2.1 per cent to $3.5 billion.

Chief executive Craig Drummond attributed the company's solid result to a series of changes made in the business over the past 18 months.

He said the company had delivered its lowest premium increase in 17 years because of Medibank's efforts to cut costs and pass on savings from reforms.

"Today's result reflects the progress we have made in delivering out customers a better experience, better service, better products and more value," Mr Drummond said on Friday.

"We are now positioning for growth which will allow us to leverage our scale to build the core business and transform into a broader health services company."

Medibank expects similar underlying revenue trends in its full-year results but warned management expenses are likely to be marginally higher in the second half, but below those recorded in the 2017 financial year.

MEDIBANK BUILDS HALF-YEAR PROFITS:

* Net profit up 6pc to $245.6m

* Revenue up 2.1pc to $3.5bn

* Interim fully franked dividend up 0.25 cents, to 5.5 cents

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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