Net income: SAR18.5mn, -43% Y-o-Y, -36% Q-o-Q, -40% vs. EFGe Operating profit: SAR23.8mn, -25% Y-o-Y, -27% Q-o-Q, -30% vs. EFGe Revenue: SAR851.6mn, +50% Y-o-Y, -5% Q-o-Q, -5% vs. EFGe   Aldrees reported weak 3Q16 results, with headline earnings down 43% Y-o-Y and 40% below estimate, as the transport segment remained a drag on performance. Results were also impaired by higher net interest costs and lower other income, according to the company’s disclosure. Revenue was up 50% Y-o-Y (-5% vs. EFGe), driven by the increases in at-the-pump petrol (+50-67%) and diesel (+80%) prices. The transport segment revenue fell Y-o-Y as per the company's disclosure due to lesser contracts. Gross margin fell c4.3pp Y-o-Y as: i) the government-set absolute petrol station margins were kept flat despite the higher at-the-pump prices; and ii) the impact of higher diesel costs in the transport division was not fully passed on (few contracts saw an upward price revision). Accordingly, gross profit fell 14% Y-o-Y (-20% vs. EFGe). EBIT margin fell a tamer c2.8pp Y-o-Y as SG&A costs were flat Y-o-Y with EBIT down 25% (-30% vs. EFGe).   Overall, a disappointing set of numbers, as recent challenges at the transport segment sustain. We will be revising our estimates to factor in the results. (Earnings release, Hatem Alaa, Nada Amin)   Aldrees: SAR27.00 as of 17 October 2016, Rating: Buy, FV: SAR49.50 per share, MCap: USD288mn, ALDREES AB / 4200.SE