NIB Holdings shares jump over 10% as HY operating profit tops estimates
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More news: NIB Holdings shares rocketed in early trade after the health insurer’s first-half underlying operating profit exceeded market estimates by 7.6%.
NIB shares were up 11.8% to $6.64 at 10:45am AEDT, making it the top performing ASX 200 stock.
Underlying operating profit of $105.8 million fell from $144.3 million in the prior corresponding period, but outstripped consensus forecasts of $98 million.
UBS analysts called the result "a better result than feared with good policy growth and more resilient margins in key [Australian residents health insurance] business".
NIB Holdings keeps guidance after drop in half-year profit
The news: Health insurer NIB Holdings has posted a 22% drop in first-half profit on the back of high claims in New Zealand but maintained its full-year profit guidance.
The numbers: Net profit for the six months to December dropped to $82.9 million from $106.5 million a year ago. Revenue was up 8% to $1.84 billion. The company will pay an interim dividend of 13 cents a share, down from 15 cents a year ago.
Margins in the domestic business pared to 7% from the unusually high 9.7% a year ago, while customer sign-ups rose at 3.3%. Growth in the non-resident segment was stronger, with customer sign-ups increasing 10.6%. Its NDIS business Thrive now has 45,000 customers, contributing $8.4 million to first half earnings.
The insurer reaffirmed its guidance for full-year policyholder growth of 3% and net margin of 6%-7%.
The context: NIB said the lower operating profit was anticipated due to a fall in earnings at its New Zealand business amid slow economic growth and industry-wide high claims, while earnings were also lower at its main domestic Australian business.
The sources: ASX, UBS research
