Medibank Private Ltd (ASX:MPL) shareholders will be paid a 7.2 cent final dividend after the leading private health insurer released its 2018 financial results. Together with its interim dividend earlier in the year, Medibank’s total dividends rose 5.8% to 12.7 cents.
In a statement to the ASX on Friday, Medibank revealed a 1.6% increase in revenue and a profit of $445 million, down 1% on its 2017 result.
According to data from Bloomberg, analysts had been expecting Medibank to report a profit of $461 million and pay dividends of 12.8 cents per share. Therefore, it appears Medibank’s profit was slightly below expectations.
Investment Income Down, Market Share Up
Medibank said its revenue from insurance premiums rose 1.2% while investment income fell 31%.
“The progress in our company is pleasing,” Medibank CEO Craig Drummond said. “We are now positioned for growth with a focus on leveraging our dual brands, building competitive advantage in health insurance and transforming into a broader health services company.”
In addition to more Aussies opting out of private cover due to the rising costs of health insurance, Medibank has had its fair share of customers leaving on account of being dissatisfied with coverage, service and prices. Fortunately, Drummond said that trend appears to be on the mend.
“The highlight for the year has been a substantial turnaround in customer advocacy and retention, driven by consistently delivering a better customer experience, more value and recognising customer loyalty,” Drummond noted.
Adding, “These improvements have seen market share grow 5 basis points over the past 6 months. This is the first time in a decade we have experienced growth over a 6-month period.”
More to come?
In the year ahead Medibank is again targeting modest growth in its market share while producing cost savings of up to $60 million between 2018 and 2020.
Since the government sold Medibank to investors in 2014 its share price has risen from $2.10 to $3.17 today, according to Google Finance.
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