Revenues – SAR155.2mn, -7% Y-o-Y, +25% Q-o-Q, +15% vs EFGe Gross profit– SAR6.01mn, vs losses of SAR20.99mn in 4Q15, losses of SAR3.7mn in 3Q16 and EFGe gross profit of SAR1.1mn Operating loss – SAR22.8mn, vs operating loss of SAR54.21mn in 4Q15, operating losses of SAR27.32mn in 3Q16, and vs EFGe operating loss estimate of SAR23.3mn Net loss– SAR38.06mn, vs losses of SAR60.29mn in 4Q15, losses of SAR39.91mn in 3Q16, and EFG loss estimate of SAR33.5mn   Chemanol reported its 4Q16 results, which was another loss-making quarter as margins remained under pressure due to the weak pricing environment. Net losses were SAR38mn, higher than our forecast for losses of SAR33.5mn mainly on the back of higher-than-expected zakat expenses.     On the operational level, gross profit came in at SAR6mn, much better than the losses reported last quarter and above our SAR1mn forecast. The better performance Q-o-Q was mainly due to higher volumes and lower costs due to the company’s cost optimisation programme, according to the release. The beat came on the back of higher-than-expected revenues (+15%), likely due to higher-than-expected sales volume, which we assumed would be weak this quarter due to the slowdown in construction activity in Saudi Arabia (Chemanol’s products are primarily used in construction). Operating losses were SAR23mn, in line with our forecast.   Another weak quarter for Chemanol as the company continues to struggle with a weak construction market in Saudi Arabia as well as muted pricing for formaldehyde derivatives globally. With that said, the recent improvement in methanol prices and the pick-up in construction activity in Saudi should provide some relief in 2017, although we still expect the company to generate losses and we remain Sellers of the name. (Company disclosure, Yousef Husseini)   Chemanol: SAR7.09 as of 18 January 2017, Rating: Sell, TP: SAR4.00 per share, MCap: USD228mn, CHEMANOL AB / 2001.SE