It all looked good on paper: combine operations in two wealthy Middle Eastern countries with substantial unmet health needs, cut costs and push ahead with growth.

It has not quite worked out that way. Since Mediclinic completed its merger with Al Noor in February 2016, securing itself a UK listing and FTSE 100 berth in the process, its shares have fallen. Those of NMC Health, another Mideast operator that sought a combination with Al Noor, have doubled.

On Tuesday, South Africa-based Mediclinic said revenues for the year to March 2017 at its Middle East operations would be lower than previously forecast. Some of this is down to bad luck. In July last year, the government of Abu Dhabi abruptly reformed Thiqa, the state health insurance scheme. Those who seek private treatment must now bear a fifth of the cost. There was an immediate impact on patient numbers.

But some woe is company-specific. Immediately before and after the completion of the merger, there was an exodus of doctors from Al Noor. Recruiting additional clinicians and changing remuneration practices has been time-consuming and costly. Rebranding Al Noor’s Abu Dhabi facilities under the Mediclinic banner will further depress margins, to the extent that almost all the profit in the Middle East this year will be made in Dubai, not Abu Dhabi.

The group remains confident that in time it can get its Mideast margins towards the 20 per cent it makes in South Africa. But the Abu Dhabi situation is frustrating. Mediclinic reports in sterling but generates its revenues in (dollar-linked) dirhams and Swiss francs. Many expected to see rising profits plus this currency tailwind driving deleveraging and helping to fund a buyout of Spire Healthcare, the quoted UK healthcare group where Mediclinic already has a 29 per cent stake. With money and management time diverted elsewhere, that may now have to wait.

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