Medibank Private posted a 5.9% increase in profit to $245.6 million on the back of slower growth in health insurance payouts, cost cutting and a lower customer churn rate.
Health Insurance operating profit, which fell in the same six months last year, rose 11% to $277.3 million. Adjusting for provisions, the latest growth was 4% to $243.5 million.
At the same time claims rose by only 1.3% to $2.6 billion, compared to 1.5% in the same six months the year before.
Premium revenue grew 1.8% to $3.17 billion compared to 1.2% in the same period last year.
In health insurance, management expenses fell by 1.9% to $273.2 million.
Gross margins improved by 40 basis points to 17.3%.
Medibank, which floated on the ASX in 2014, in April increases its premium by an average 3.88%, the lowest in 17 years.
“Today’s result reflects the progress we have made in delivering our customers a better experience, better service, better products and more value. This half we have paid $2.6 billion in claims on behalf of our customers, supporting them with their health and wellbeing,” says Chief Executive Officer Craig Drummond.
“2018 marks a step change for Medibank. 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. Our progress means we are now in a position to pursue new initiatives, continue to invest in our chronic disease management programs and expand our in the home programs.”
The company declared a fully franked dividend of 5.50 cents a share, a 4.8% rise and a payout ratio of 64.6% of underlying profit.
The 2018 first half results at a glance: