Net loss - EGP41mn, N/M Y-o-Y, +21mn Q-o-Q, +7 vs. EFGe Gross profit - EGP54mn, -46% Y-o-Y, +16% Q-o-Q, +6% vs. EFGe Net operating loss - EGP11mn, N/M Y-o-Y, +12mn Q-o-Q, +6mn vs. EFGe   Lecico reported net loss of EGP41mn in 1Q16 vs. net profit of EGP2mn in 1Q15, which is broadly in line with our net loss forecast of EGP45mn. The loss was driven mainly by shrinking margins on higher cost of sales/unit on continued reduction in production, as well as minor decrease in revenue.   Revenue came in at EGP319mn, showing a mild decline of 3% Y-o-Y (+4% Q-o-Q, +7% vs. our forecast). The Y-o-Y drop in revenue was driven by i) drop in sanitary ware revenue (-6% Y-o-Y, 0% Q-o-Q) on a 9% drop in volumes, as sharp drop in export volumes (-26% Y-o-Y) outweighs decent-yet-slower growth in domestic volumes  (+17%), and despite a mild improvement in average selling price of 4%, affected by the March devaluation of the EGP on average export prices; and ii) minor decrease in tiles revenue (-2% Y-o-Y, +8% Q-o-Q) on a drop in average selling prices  (-8% Y-o-Y, -2% Q-o-Q) on promotions and price reductions to face competition that outweighed an increase in domestic tiles volumes (+8% local, 0% export).   Gross profit fell 46% Y-o-Y (broadly in line) and margins contracted 13pp and EBITDA was further down 84% Y-o-Y to EGP8mn (-17% vs. our estimate) and EBITDA margin shrank 13pp as well to 2.5% vs. 15.1% in 1Q2015 and broadly in line with our forecast of 3.2%. The company showed net operating loss of EGP11mn vs. net operating profit of EGP24mn in 1Q16 and net operating loss of EGP23mn in 4Q2015. (Earnings release, Tarek El Shawarby)   Lecico Egypt: EGP3.30 as of 23 May 2016, Rating: Neutral, FV: EGP5.00 per share, MCap: USD30 million, LCSW EY / LCSW.CA