Discovery Full Year Profit Declines 6% as Claims, Costs IncreaseRenee Bonorchis
Discovery Holdings Ltd., owner of South Africa’s largest medical-insurance administrator, said fiscal full-year profit fell 6 percent as claims and costs rose.
Net income for the 12 months to June 30 dropped to 2.06 billion rand ($201 million), from 2.2 billion rand a year earlier, the Johannesburg-based company said in a statement today. Diluted earnings a share excluding one-time items was 4.96 rand, missing the median 5.02 rand estimate of six analysts surveyed by Bloomberg.
Discovery operates in South Africa, the U.K. and China. In February it boosted its stake in China’s Ping An health insurance unit to 25 percent from 20 percent and expanded its wellness-based life-insurance model, called Vitality, into Singapore through a joint venture with AIA Group Ltd in July.
The dividend rose 20 percent to 1.245 rand a share, Discovery said. Claims gained 33 percent to 8.9 billion rand while costs related to acquisitions, marketing and administration increased 22 percent to a combined 11.7 billion rand.
Discovery rose 2.6 percent to 86.46 rand as of 9:50 a.m. in Johannesburg. It is the best performing stock on the five-member FTSE/JSE Life Assurance Index this year, having risen 38 percent compared with the average return of 13 percent.