NIB Holdings Limited (ASX: NHF) offers health insurance products. Depending on the specific product, the Company covers ambulance costs and reimburses for expenses not covered by Medicare including dental, optical, physiotherapy and natural therapies, and some hospitalisation costs.
On 18 February 2019, the company has through a release on ASX stated that at a group level, that its operating performance for first half fiscal 2019 (1H19) produced another strong result with total Group revenue up 10.9% to $1.2 billion and underlying operating profit (UOP) rising 18.6% to reach $114.3 million.
The company had continued focus on meeting its members’ and travellers’ expectations, along with its strategic execution.
The company’s Net profit after tax (NPAT) was recorded at $74.3 million up by 4.8%. This is an improvement on 1H18 but was impacted by soft equity investment returns, with net investment income of just $1.5 million, down 91.2%. Earnings per share (Statutory) was 16.4 cents per share up 3.1%.
The Board has declared a fully franked interim dividend of 10.0 cents per share, in line with an increase of 11.1% on last year. The interim dividend has an ex-dividend and record date of 28 February and 1 March 2019 respectively with payment to be made to shareholders on 2 April 2019.
The company’s flagship arhi business delivered an impressive result, with UOP up 33.2% to $88.3 million. The premium revenue rose 11.1% to just over $1 billion, reflecting above-industry policyholder growth, premium adjustments and a full six-month contribution from GU Health.
The firm’s New Zealand business delivered an improved top line result, with premium revenue up 7.2% to $104.5 million, while earnings were impacted by a growth in claims. Claims expenses rose 9.8% for the period due to an increase in utilisation, with UOP down 27.5% to $9.5 million.
The company’s multi-channel distribution strategy again made good progress with net policyholder growth for the period up 50bps to 1.7%. The management has recently rolled out in New Zealand its online health directory, Whitecoat, to help members search, compare and select a healthcare provider, including specialists, physiotherapists. This is another example of the way the firm taps into NIB’s Group capability and skills to benefit its New Zealand operations and members.
The firm’s international inbound health insurance business continues to deliver impressive top line and earnings growth, with premium revenue up 16.6% to $53.3 million and UOP rising 15.5% to $17.9 million. Its sales pipeline for international students and workers has been a key driver of these commercial results, with net policyholder growth for the period of 8.8%.
The outlook for the company’s iihi business remains positive, supported by strong growth prospects and stable margins.
Now, let us have a quick look at NIB Holdings Ltd’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $5.68, down by 2.405% during the day’s trade with a market capitalisation of ~$ 2.65 Bn. The counter opened the day at $ 5.880, reached the day’s high of $ 5.930 and touched the day’s low of $ 5.640 with a daily volume of 1,269,080. The stock has provided a Year Till Date return of 13.23% & also posted returns of -9.91%, 11.07% & 12.36% over the past six months, three & one-months period respectively. It had a 52-week high price of $ 7.200 and touched 52 weeks low of $ 4.640, with an average volume of 796,343 approximately.
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