NIB shares slump as earnings, dividend miss estimates
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More news: Shares in NIB Holdings have slumped nearly 15% to $6.20 after the health insurer missed its guidance for growth in policy holders and lagged analyst expectations.
NIB said its domestic customer sign-ups rose 2.5% over the year but this was below its guidance for growth of 3%to 4%.
UBS analysts said the earnings and dividend were a miss, with claims and costs disappointing, and one-off M&A costs in relation to the Thrive acquisition $12 million above estimates. UBS has a 'buy' rating on the stock.
What they said: "All up, this appears a soft result, broadly below consensus expectations, and will likely need explanation of near term underlying margin trends," the analysts said in a note.
NIB Holdings full-year profit jumps on record sales
The news: Health insurer NIB Holdings has lifted its full-year profit on the back of growth in its resident insurance business and strong investment returns.
The numbers: Net profit for the year to June jumped 62% to $186.6 million, while revenue was up 9% to $3.43 billion. The company will pay a final dividend of 14 cents a share, taing full-year dividend to an improved 29 cents a year.
The context: NIB said its domestic customer sign-ups rose 2.5% over the year, above industry growth levels, and despite sustained household cost of living pressures, intense market competition, and after two back-to-back premium increases in FY24.
That lagged its guidance for policyholder growth, but still resulted in its Australian Residents Health Insurance business achieving its highest sales ever. Strong demand for international workers and a return of international students also drove non-resident signups to a record level.
Outgoing CEO Mark Fitzgibbon said although a number of macro-economic and cost of living factors suggest a level of caution, the outlook across the group remains optimistic.
What they said: “Thankfully the pandemic is behind us, yet its consequences continue to play out. People are today more aware of risks to their health and the need for protection,” he said.
The source: ASX announcement
