Medibank shares lift on better-than-expected result
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More news: Shares in Medibank Private jumped 9% to $4.38 in early trading on the ASX after the country's biggest health insurer lifted dividend after solid earnings growth from its main segments, helped by a favourable business mix and benign claims inflation.
Shares were also supported by news that the federal government had approved an increase in health insurance premiums.
Medibank's interim profit dips, to return $160m to customers
The news: Australia’s biggest health insurer Medibank has posted a small drop in first-half profit despite strong growth in the non-resident market and announced it will return $160 million to customers related to COVID savings.
The numbers: Net profit for the six months to December fell 0.8% to $340.3 million. Revenue was up 6.8% to $4.27 billion. The company will pay a dividend of 7.8 cents a share, up from 7.2 cents a year ago.
The context: Medibank said customer sign-ups in the non-resident segment for the period were up 12.6%, while customer growth in the local market rose 0.9%. Chief executive David Koczkar said the health insurance market remained strong, although cost-of-living pressures resulted in a modest increase in the number of customers across the industry lapsing and switching funds. Its main health insurance business made an operating profit of $349 million, up 10%, while Medibank Health earnings jumped 41% to $37.6 million.
Separately, the insurer said it will return another $160 million to customers as part of its pandemic give-back program, with Medibank customers to each receive at least $50 with some eligible for as much as $255. The give-back program is based on a commitment from Medibank that it would not profit from the pandemic when customers’ capacity to use their private health cover was curtailed.
The source: ASX
