Medibank FY26 Underlying NPAT $636.8m, Ordinary DPS 19.2c

Medibank (ASX:MPL) reported FY26 group operating profit of $813.5 million, up 6.7 per cent on FY25, and underlying net profit after tax of $636.8 million, up 2.9 per cent, on group revenue from external customers of $9,115.2 million, up 5.9 per cent. Net profit after tax attributable to Medibank shareholders was $638.7 million, up 27.5 per cent; the comparison is against an FY25 result that carried a $182.8 million pre-tax movement in the COVID-19 equity reserve, which was finalised in that year and did not recur in FY26. Underlying net profit after tax and underlying earnings per share are adjusted for movements in that reserve and for the normalisation of investment returns, and underlying earnings per share was 23.1 cents, up 2.9 per cent. Net investment income fell 13.9 per cent to $178.9 million, and non-recurring cybercrime costs relating to the 2022 cybercrime event were $34.9 million, which Medibank said include IT security uplift and legal and other costs associated with regulatory investigations and litigation.

In Health Insurance, resident premium revenue rose 4.5 per cent to $8,267.9 million and net resident claims expense, which the release states includes a 20 basis point benefit from risk equalisation, rose 4.4 per cent to $6,918.2 million. Resident gross margin was up 10 basis points to 16.3 per cent, with the Health Insurance gross margin unchanged at 17.0 per cent and the Health Insurance operating margin unchanged at 9.0 per cent. Total net resident policyholder growth was 1.1 per cent, or 22,100 policyholders, while non-resident policy units fell 2.3 per cent to 346,200, which Medibank attributed to lower student growth reflecting tighter migration settings and the run-off of large cohorts acquired after borders reopened, partially offset by strong growth in workers. Medibank Health segment profit rose 31.3 per cent to $100.7 million on revenue up 30.8 per cent to $634.8 million, which the company said reflected a 12-month contribution from 100 per cent ownership of Amplar Health Home Hospital and a six-month contribution from Better Medical. The Board determined a fully franked final ordinary dividend of 10.9 cents per share, taking the total FY26 fully franked ordinary dividend to 19.2 cents, up 6.7 per cent on FY25 and representing an 83.0 per cent payout ratio of underlying net profit after tax, normalising for investment market returns. For FY27 Medibank said it expects resident private health insurance gross margin to be broadly consistent with FY26, subject to the outcome of the 1 April 2027 premium increase, and Medibank Health segment profit growth of about 25 per cent including a full-year contribution from Better Medical.