Headline net loss: SAR15.7mn vs. net income of SAR38.7mn in 4Q15, SAR22.5mn in 3Q16, SAR0.7mn EFGe Revenue: SAR215.2mn, -18% Y-o-Y, -17% Q-o-Q, -12% vs. EFGe Gross profit: SAR74.9mn, -10% Y-o-Y, -12% Q-o-Q, -4% vs. EFGe Operating profit: SAR25.7mn, -31% Y-o-Y, -29% Q-o-Q, -15% vs. EFGe   Halwani reported headline 4Q16 results with a net loss of SAR15.7mn (vs. net income of SAR38.7mn in 4Q15) missing our estimate of earnings of SAR0.7mn due to higher-than-expected FX losses and weaker revenue. In addition to lower revenue and higher SG&A costs, results were affected by:  FX losses of EGP57.9mn as a result of the translation of the Egyptian operation’s foreign currency liabilities (higher than initial guidance of cSAR28mn that was based on a USD/EGP of 13 vs. exchange rate at quarter close of cEGP18); and depreciation charges (started fully depreciating the new cSAR430mn KSA complex from July 2016; also the new Egypt poultry factory). Results would have been weaker if it weren’t for a reversal of receivable provisions (booked in SG&A costs) and tax credits in Egypt as a result of losses there.   Revenue was down 18% Y-o-Y (-12% vs. EFGe) affected by weak export & KSA sales and, more importantly, translation losses due to EGP devaluation. Gross margin remained on an uptrend for the eighth quarter in a row (+3.1pp Y-o-Y) due to low commodity prices (sesame, etc.) with gross profit down only 10% Y-o-Y  (-4% vs. EFGe). EBIT margin, however, fell c2.2pp Y-o-Y as SG&A costs rose 7% Y-o-Y mainly on higher selling & marketing costs to support new products in KSA and Egypt (mainly value-added poultry). We are Sellers of Halwani as we expect earnings to remain under pressure in the short term as a result of a weaker EGP given that Egypt represents the bulk of earnings (70%+ historically). (Company disclosure, Hatem Alaa, CFA, Nada Amin)   Halwani Brothers: SAR57.50 as of 17 January 2017, Rating: Sell, TP: SAR46.00 per share, MCap: USD439mn, HB AB / 6001.SE