What happened to NIB share price?
Australian health and medical insurance giant NIB [ASX:NHF] is up 2.18% on open today after releasing FY18 first half results.
NIB acquired GU Health in October of last year, and has posted a net profit after tax of $70.9 million, down 0.3%, reflecting the costs of the acquisition.
The $3 billion organisation has had an impressive year, seeing roughly a 29% stock price increase since 20 February 2017. This is on top of the dividends paid, which equate to a current yield of 2.89%.
Managing director Mark Fitzgibbon stated:
‘…the first half result was as expected and is on track to deliver improved consolidated earnings for the full year.’
More to come in 2018 for NIB?
Fitzgibbons points at a soft domestic insurance market, as well as stagnant household incomes and vibrant market competition as the cause for the margin contractions.
NIB’s subsidiaries had a strong year, with earnings growing up 35.6% to $30 million accounted to the group’s underlying operating profit.
Fitzgibbons remains positive on the outlook for private health and NIB, stating:
‘No amount of political posturing is going to change the fact that Australians are each year spending somewhere between 5% and 6% more on their healthcare…’
NIB expects underlying operating profit for the full year to be at least $165 million, which is an increase on the previous estimates.
Editor, Money Morning
Junior Analyst, Money Morning
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