Reported net profit : SAR488.5mn, +1% Y-o-Y, -25% Q-o-Q, -1% vs. EFGe  Revenue: SAR3,609.3mn, +1% Y-o-Y, 0% Q-o-Q, -6% vs. EFGe Net operating profit: SAR661.5mn, +16% Y-o-Y, -10% Q-o-Q, +7% vs. EFGe   Almarai posted 4Q16 headline numbers, with earnings coming in flattish Y-o-Y (+1% Y-o-Y, -25% sequentially on seasonality), in line with our forecast (-1%). Wider margins from some lower commodity price and cost controls were offset by some below-the-line items including a SAR14.7mn decline in FX gains, an asset impairment of SAR12.4mn and higher net interest costs by SAR17.1mn.   Revenue growth reached a new historic low of 0.7% Y-o-Y (-6% vs. EFGe) as: Dairy & juice revenue fell (-2%) on adverse market conditions, with segment’s pre-minority earnings flattish (+0.5%) on commodity benefits and higher operational efficiency Bakery fared decently, with revenue and net income growing 7%, driven by the new bakery plant and product launches Poultry top-line rose 16% Y-o-Y with poultry losses also narrowing for the first time in three quarters to SAR42.1mn on an improved competitive landscape and operational efficiencies, in our view Geographically, KSA revenue was flat (-0.2%), as were other GCC countries (+0.3%) and other countries (mainly Egypt & Jordan, etc.) +8% (despite currency translation losses in Egypt)   Gross margin improved c3.1pp Y-o-Y (+2.6pp vs. EFGe) despite a surge in electricity and transportation costs due to lower input costs and some efficiencies. Accordingly, gross profit rose 9% Y-o-Y and was in line with our estimate (mainly on a top-line miss). SG&A costs growth was tame once more up only 4% Y-o-Y (-5% vs. EFGe). Operating margin widened c2.3pp to 18.3% (+2pp vs. EFGe) with EBIT jumping 16% Y-o-Y (+7% vs. EFGe).   The slowing momentum of top-line growth remains a key concern, amidst a challenging competitive and economic environment. While margin improvement is encouraging, we expect headwinds mainly from plans to gradually phase out green fodder cultivation. We have a Neutral rating on the stock. (Company disclosure, Nada Amin, Hatem Alaa)     Almarai: SAR69.00 as of 12 January 2017, Rating: Neutral, TP: SAR54.50 per share, MCap: USD14,720mn, ALMARAI AB / 2280.SE