Net income – SAR43mn, -36% Y-o-Y, -14% Q-o-Q, +44% vs. EFGe Gross profit – SAR55mn, -34% Y-o-Y, -20% Q-o-Q, +22% vs. EFGe Net operating profit – SAR38mn, -44% Y-o-Y, -28% Q-o-Q, +27% vs. EFGe   Eastern Cement Company reported its preliminary 3Q16 headline figures. Earnings dropped 36% Y-o-Y, 44% above our estimate. The company attributed the decrease in earnings to i) drop in sales volumes on weak demand; ii) increase in COGS; and iii) increase in SG&A and other expenses. Revenue dropped 10% Y-o-Y to SAR172mn despite a 25% decrease in sales volume, as the average selling price was up 20% Y-o-Y, likely on higher contribution of high priced pre-fabricated concrete. Gross profit was down 33% Y-o-Y (margin shrink 11 pp to 32%), while EBIT dropped 43% on increase in SG&A expenses (+17% Y-o-Y), and EBIT margin contracted 13 pp Y-o-Y to 22%. The preliminary results figures do not account for revaluation on its Yemeni subsidiary, as Eastern Cement's management is still studying the impact of deterioration in its investments in the Arabian Yemen Cement Company on its financials, given the current political instability in Yemen. Eastern Cement owns c32% in Arabian Yemen Cement Company. (Earnings release, Tarek El-Shawarby)   Eastern Cement: SAR22.10 as of 18 October 2016, Rating: Buy, FV: SAR40.70 per share, MCap: USD507mn, EACCO AB / 3080.SE