The Medibank Private (ASX:MPL) share price has fallen 7 cents or 2.45% to $2.79 after the private health insurance company reported group net profits after tax slumped 28% in the year ended June 30th 2020.
Despite the fall in profits, Medibank grew resident policyholder numbers by 10,600 in FY20, no mean feat in a time of significant uncertainty. Furthermore, as at 8 August 2020, Medibank have seen resident policyholders grow by approximately 21,000 in FY21 so far.
Weighing on profits was that health funds were were among the first to act to assist customers in the COVID-19 pandemic, with Medibank providing customers with a support package of more than $185 million. This included a 6-month postponement of premium increases and a financial hardship package including a 50% waiver on premiums for 6 months for those in financial hardship.
“Medibank Health has continued to grow despite the impact of the pandemic on some areas of the business. Our telehealth team has played a major role in the government’s public
response to COVID-19 which meant we needed to rapidly scale operations to meet demand. Furthermore, we expect rising demand from customers for in-home care,” said Medibank CEO Craig Drummond.
Medibank announced a fully franked final dividend of 6.3 cents per share, taking the total ordinary dividend to shareholders in FY20 to 12.0 cents per share, 8.4% below FY19.
Looking ahead, Mr Drummond said that despite the ongoing financial and health impacts of COVID-19, Medibank remains well positioned in the broader health industry. He said Medibank’s strong customer and employee advocacy, a clear strategy and a sound financial position continue to buffer the company to the continuing uncertainty.
Medibank shares have fallen more than 10% so far in 2020.
A recent note out of Goldman Sachs revealed that its analysts retained their sell rating and $2.83 price target on Medibank Private shares.