Australia, Asia send Bupa profits higher

Bupa reported revenues up 6% in the first half of 2011, driven by strong performances in Australia and Asia, as well as favorable foreign exchange movements. The firm’s pre-tax profit rose 51% to GBP 244.1 million.

Revenues across Bupa’s international businesses increased 14% and pre-tax profit 63%, with most subsidiaries delivering strong growth (particularly Bupa International and Bupa Australia).

Bupa Latin America’s margin narrowed due to rising claims costs, and Bupa Arabia’s profits suffered from a one-off regulatory charge.

Commenting on the results, Bupa CEO Ray King said:

Bupa has achieved good momentum in Australia, Asia and in our expatriate health insurance business. In Europe, despite tough economic conditions, we improved performance in our health insurance businesses by focusing on customer retention and operational efficiency. In UK Care Services, we continued to control costs carefully to mitigate the impact of extreme pressure on public sector fees and referrals, and delivered further good growth in Australia and New Zealand where market conditions were stable.

Indeed, Care Services delivered the weakest performance, with revenues up only 1% and profits 2% over 2H10. The company attributed this to “weak public sector fees and referrals,” which prompted King to level a critical broadside at local UK health authorities Wednesday.

“We are calling for the chronic underfunding of the social care system to be urgently addressed,” he said. “At the absolute minimum, there must be a real terms increase in funding for local authority purchased care home places over 2012-15.”

Companies discussed

Bupa International is a segment of the UK’s British United Provident Association Limited. Bupa is a market leader in international health insurance, operating (either directly or through one of its subsidiaries) in countries from Europe to the Middle East and Asia. Bupa reported pre-tax profits up 9% at GBP 464.9 million in 2010, driven largely by its Asian and Australian business segments.