Reported net profit: SAR43.4mn, -11% Y-o-Y, -7% Q-o-Q, -20% vs. EFGe Revenue: SAR216.1mn, -3% Y-o-Y, 0% Q-o-Q, -9% vs. EFGe Operating profit: SAR12.1mn, -35% Y-o-Y, -16% Q-o-Q, -42% vs. EFGe   Budget Saudi reported weak 3Q16 results, with earnings down 11% Y-o-Y (20% below our estimate) on weak revenue and margins. We also think growth in gain in used car sales was minimal (not disclosed yet). Revenue was down 3% Y-o-Y (-9% vs. EFGe) on a continued drop in short-term rental revenue, as demand continued to shift to cheaper smaller cars (medium to economy), with the segment's utilisation also falling. Long-term rentals, including trucking, continued to grow, albeit at a slower pace as per the company's disclosure. Gross margin fell c1.3pp Y-o-Y to 15.2% (vs. EFGe: 16.9%), leading to a 10% Y-o-Y drop in gross profit (-18% vs. EFGe), likely due to sales mix (short-term rentals have the highest margins). Operating margin (ex. gain on sale of used vehicles) fell a more significant c2.8pp Y-o-Y, as this quarter included receivable provisions of SAR2.9mn vs. none last year (SAR1.5mn booked in 2Q16), driving operating profit down 35% Y-o-Y (-42% vs. EFGe).   Overall, a disappointing set of numbers, with short-term rentals worsening and becoming a real earnings drag. We have a Buy rating on the stock on valuation grounds. We will be revising our numbers to factor in the results. (Earnings release, Hatem Alaa, Nada Amin)   Budget Saudi: SAR25.80 as of 16 October 2016, Rating: Buy, FV: SAR52.00 per share, MCap: USD420mn, BUDGET AB / 4260.SE