Australia’s Medibank beats profit view, says customer losses slow

(C) Reuters. FILE PHOTO: A woman walks past a branch of the Australian health insurer Medibank Private in Sydney October 20, 2014. REUTERS/David Gray/File Photo

By Harish Sridharan

(Reuters) – Medibank Private Ltd, Australia’s top health insurer, reported a bigger-than-expected rise in first-half profit on Thursday and said it signed on policyholders this month, a reversal from the losses since a high-profile hack in October.

The company’s shares closed up 6.5% at A$3.28, recording their best session in nearly three years and reaching their highest level since Medibank disclosed the hack in late October that had compromised the data of millions of customers.

The loss of confidence following the hack led to Medibank losing 13,000 customers between October and December, curbing the growth in policyholders for the July-December period to 0.1%.

However, the rate of losses slowed in January and reversed to a net addition of 200 policyholders this month through Feb. 18, Medibank said.

That uptick, Citi Research analysts said, gives some hope that Medibank can regain lost policyholders, but cautioned “there is always the possibility of a further wave of attacks from the criminals.”

Still, the customer additions, a bigger first-half profit and an increased dividend boosted the stock on the day and helped it cut its losses since the hack was disclosed to 7%.

(Graphic: Medibank stock Medibank stock recovering, https://www.reuters.com/graphics/MEDIBANK-RESULTS/MEDIBANK-RESULTS/mypmoaokepr/Medibank.png)

Medibank reported that its net profit after tax rose 5.9% to A$233.3 million ($159.4 million) in the six months ended Dec. 31, which, according to brokerage firm UBS, beat the consensus estimate of A$211 million.

Chief Executive David Koczkar said the results were helped by “standout” growth in the company’s international business.

A key portion of Medibank’s earnings comes from its non-resident portfolio as Australia requires all incoming visitors and students to have health coverage.

The 17% jump in policyholders in that business came as more international students, visitors and workers return to the country as the pandemic waned.

“We will continue to focus on growing our share in this market,” Koczkar said in a statement.

Medibank also declared an interim dividend of 6.3 cents per share, up from 6.1 cents last year. ($1 = A$1.4635)