Alkhaleej Training and Education Company [4290.SE] reported 3Q18 results, with earnings down 10% Y-o-Y to SAR18.9mn, on higher SG&A costs due to the reduction of government HRDF subsidy, as well as higher financing expenses. Top line rose 13% Y-o-Y to SAR212mn driven by higher revenues from schools, training segments and income from subsidiaries. Gross margin expanded 70bps to 26.6%, with gross profit growing 16% Y-o-Y to SAR56.4mn. Operating margin contracted a sharper 140bps to 12.4%, with operating profit inching up by 1% Y-o-Y to SAR25.6mn as SG&A increased 33% Y-o-Y. Lastly, below EBIT items (mostly finance charges) increased 53% Y-o-Y.