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Highlights
- Medibank shares jump 7% to a 52-week high following strong half-year results.
- Underlying net profit after tax rises by 13.8% to $298.7 million.
- Fully franked interim dividend increases by 8.3% to 7.8 cents per share.
Shares of Medibank Private Ltd (ASX:MPL) surged by 7% on Thursday morning, reaching a 52-week high of $4.31. The spike follows the release of the private health insurer’s half-year financial results, which exceeded market expectations and demonstrated robust growth.
The company reported a 6.1% rise in revenue, amounting to $4,270.7 million, driven by strong Health Insurance premium revenue and significant gains in net investment income. While Medibank’s reported net profit after tax saw a marginal 0.8% decline to $340.3 million, this was attributed to a sharp reduction in COVID-19 reserve movements. Excluding this factor, underlying net profit after tax soared 13.8% to $298.7 million, showcasing the company's strong operational performance.
The strong financial results have allowed Medibank’s board to reward shareholders with a fully franked interim dividend of 7.8 cents per share, reflecting an 8.3% increase from the previous period. Additionally, the company announced another $160 million COVID-19 cash giveback to customers, bringing its total financial support package to $1.62 billion to date.
Growth Drivers and Future Outlook
Medibank’s revenue growth was fueled by a 4.1% increase in Health Insurance premium revenue, as well as a 37% rise in net investment income, benefiting from strong international equities performance and favorable foreign exchange movements.
Despite the impressive results, the company refrained from providing earnings guidance for FY 2025. However, management expects moderated industry growth compared to FY 2024, particularly in the resident health insurance sector.
Additionally, the company revised its forecast for resident health insurance claims per policy unit growth to 2.4%–2.6% for FY 2025, slightly lower than its previous estimate of approximately 2.7%.
Medibank’s stock has gained nearly 20% over the past year.
