Medibank kept a lid on health insurance payouts to deliver a 46.4% rise in full year profit to $417.6 million, just below market expectations.
The rate of growth in health claims was limited to 1% for a total of $5.1 billion. At the same time, health insurance premium revenue rose 4% to $6.17 billion.
Medibank also increased its gross margin to 16.6% from 14.2% but has warned of slowing revenue and continued loss of market share in 2017.
A short time ago, Medibank’s shares were down more than 5% to $2.82.
CEO Craig Drummond, on his first result since starting last month, says revenue growth is soft due to underperformance of the Medibank brand and a slowing market.
“Growth was impacted by below market performance in both the acquisition and lapse of members,” he says.
“While Medibank brand volumes were down, the ahm brand continued to grow, albeit at a slower rate.
“Member switching between health insurers increased further in the period and the Medibank underperformance in this segment was the largest contributor to the market share reduction in 2016.”
The company declared a fully franked final dividend of 6 cents a share, bringing the full year payout to 11 cents.
The results in detail: