Recurring net income – EGP137mn, +91% Y-o-Y, +21% Q-o-Q, +5% vs. EFGe Reported net income – EGP109mn, +62% Y-o-Y, +220% Q-o-Q, +5% vs. EFGe Revenue – EGP574mn, +3% Y-o-Y, +4% Q-o-Q, +3% vs. EFGe EBITDA – EGP231mn, +36% Y-o-Y, +20% Q-o-Q, -1% vs. EFGe   Arabian Cement Company (ACC) released its 2Q16 consolidated figures, showing 91% Y-o-Y growth in recurring earnings (excluding FX and deferred tax) to EGP137mn, in line with our estimate (+5%) due to robust improvement in margins and 40% drop in net interest expense. Reported net profit was up 62% Y-o-Y to EGP109mn. Revenue inched up 3% Y-o-Y in 2Q16 to EGP574mn, in line with our estimate (+3%). This was driven by modest increase in average ex-factory price by 3% to EGP590 per tonne (vs. EGP542 per tonne in 1Q16), as volumes were flat Y-o-Y at 973,000 tonnes. Gross profit was up 32% Y-o-Y ( in line, -2%) on improved gross margin by 9.7 pp to 43.4% (-2.0 pp vs. our estimate), driven by lower CoGS (-12%) due to non-reliance on imported clinker versus 2Q15 that also mitigated the increase in fuel bill due to EGP devaluation. EBITDA was further up 36% (in line) on maintained SG&A (flat Y-o-Y), and EBITDA margin improved by 9.7pp Y-o-Y as well to 40.3% (-1.6 pp vs. our estimate).   Our recurring pre-tax earnings (ex-provisions, FX loss) forecast for FY16 calls for 17% Y-o-Y growth on: i) revenue growth of 4% (price +3%, volume +1.5%); and ii) EBITDA margin expansion of 120 bps to c31% on non-reliance on imported clinker that should mitigate the fuel bill rise (+19% Y-o-Y) due to devaluation. We will revisit upwards our FY16 EBITDA margins, as we believe there is a potential upside to our margins forecast in 2H16 and adjust our views to reflect the expected increase in sector capacity in the medium term. (Earnings release, Tarek El-Shawarby, Wafaa Baddour)   Arabian Cement (Egypt): EGP7.08 as of 15 August 2016, Rating: Buy, FV: EGP13.00 per share, MCap: USD302mn, ARCC EY / ARCC.CA