Recurring pre-tax net income – EGP80mn, -27% Y-o-Y, -52% Q-o-Q, -26% vs. EFGe Reported net income – EGP15mn, -88% Y-o-Y, -87% Q-o-Q, -70% vs. EFGe Revenue – EGP531mn, -8% Y-o-Y, -7% Q-o-Q, +2% vs. EFGe EBITDA – EGP163mn, -11% Y-o-Y, -30% Q-o-Q, -7% vs. EFGe   Arabian Cement Company (ACC) released its 3Q16 consolidated figures, showing a 27% Y-o-Y drop in recurring pre-tax earnings (excluding FX, provisions and other income) to EGP80mn (26% below our estimate), driven by i) lower revenue (-8% Y-o-Y); ii) higher SG&A expenses (+31% Y-o-Y); and iii) higher depreciation (+19% Y-o-Y). Reported net profit was down 88% Y-o-Y to EGP15mn on EGP42mn FX loss, associated with USD debt and other FX liabilities, vs. FX loss of EGP13mn in 3Q15 and EGP15mn provisions. Revenue was down 8% Y-o-Y in 3Q16 to EGP531mn, in line with our estimate (+2%), driven by a drop in sales volumes (-17% Y-o-Y) to 953,000 tonnes due to some technical issues offsetting 10% increase in average ex-factory price to EGP558 per tonne.   Gross profit was affected by lower revenue and decreased 7% Y-o-Y (broadly in line, -5%), while GPM was flat Y-o-Y at c35% (-3pp vs. estimate). EBITDA was down 11% Y-o-Y (broadly in line, -7%) on higher SG&A expense (+31% Y-o-Y) due to rising salaries, and EBITDA margin softened 100 bps to 30.6% (-3 pp vs. our estimate), while EBIT was further down 22% Y-o-Y (-17% vs. our estimate) on higher depreciation on capitalising some assets. On a Q-o-Q basis, EBITDA margin was down 10pp, likely due to lower sales volumes and hike in fuel cost driven by high coal prices.   We will revisit our earnings forecast for 2016 and beyond to reflect the impact of the recent EGP flotation that is expected to lead to i) large FX loss in 4Q16 as the company holds FX liabilities (debt and other liabilities); amounting to cUSD66mn; and ii) hike in fuel bill driven by higher coal prices and EGP flotation. (Earnings release, Tarek El-Shawarby)   Arabian Cement (Egypt): EGP7.93 as of 15 November 2016, Rating: Buy, FV: EGP13.00 per share, MCap: USD198 million, ARCC EY / ARCC.CA