Reported net profit: SAR7.8mn, -77% Y-o-Y, -74% Q-o-Q, -79% vs. EFGe                                                      Total revenue: SAR506mn, -8% Y-o-Y, -12% Q-o-Q, -15% vs. EFGe Net operating profit: SAR31.9mn, -26% Y-o-Y, -26% Q-o-Q, -47% vs. EFGe   Nadec reported another weak set of results in 4Q16 with earnings falling 77% Y-o-Y (-79% vs. EFGe) on a combination of lower revenue and margins Y-o-Y as well as higher net interest costs (due to rising rates) and other expenses.   Revenue fell 8% Y-o-Y (-15% vs. EFGe) after being flattish in 9M16 as dairy & food and agriculture sales both fell. Dairy companies have all so far reported weak top-line growth due to intense market competition amidst slowing consumer demand.   Margins fell across the board; gross margin contracted c2.9pps to 42.1% (c2pp ahead of our forecast) as favourable commodity prices were offset by higher fuel and energy costs (cSAR63mn impact for the year; SAR14mn in 4Q16). Also, we believe there was strong discounting, particularly in the long-life dairy segment, during the quarter. Accordingly, gross profit fell 14% Y-o-Y to SAR213mn. Operating margin fell a tamer 150bps to 6.3% as the company managed to cut SG&A expenses c12% Y-o-Y.   We reiterate our Neutral rating on Nadec as we expect plans to gradually phase out green fodder cultivation in KSA (still most of its needs are sourced locally) as well as lower energy subsidies to pressure margins in the absence of product price increases and given slowing top-line momentum. (company, Hatem Alaa, CFA , Nada S. Amin)   NADEC: SAR22.29 as of 17 January 2017, Rating: Neutral, TP: SAR22.50 per share, MCap: USD503mn, NADEC AB / 6010.SE