Medibank Share Price Takes a Hit after Revealing a Slip in Profit
Medibank Private Limited’s [ASX:MPL] share price fell 5.36% immediately this morning, after reporting a 1% drop in profit for the 2018 financial year.
The group’s net profit fell by $5 million in comparison to the year before, from $449.5 million to $445.1 million.
The health insurer’s shares are currently trading at $3.00, down 17 cents from yesterday’s close price.
Why did Medibank’s profit drop?
The drop in profit was due to weaker market concerns, causing a $30.6 million drop in net investment income.
Although, despite the fall, Medibank’s market share increased by 26.9% in the past six months — the first time in a decade where they’ve seen growth over a six month period.
In addition, the group’s operating profit was up 9.7% from the previous year, and overall revenue was 1.6% higher.
What can we expect to see moving forward?
Aside from the profit slip, Medibank’s full-year results are quite promising. The health side of the business — including life, pet and travel insurance — reported an increase of 32.5%, up $11.6 million from the year prior.
Medibank Private CEO, Craig Drummond said the strong results and turnaround in customer retention and advocacy have well-positioned the company for growth.
‘This result demonstrates that our core health insurance business is back on track and in the coming year we will continue to transform our relationship with our customers and deliver a more personalised and proactive experience.’
Although investors were hoping for better results, there doesn’t seem to be any dark days ahead for the insurance giant.
For Money Morning
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