National Agriculture Development Company (Nadec) announced in a disclosure today that the company anticipates a total impact from changes to utilities tariffs and fuel prices of SAR100-110mn in 2016 divided as follows: 1) SAR70mn from the direct impact of the changes, mostly due to increases in petrol and diesel prices; ii) another SAR30-40mn, indirectly as the company anticipates that similarly affected local suppliers will increase input cost prices (which we see as somewhat aggressive). Assuming that the cost increase fully trickles down to earnings (without reflecting any additional efficiencies) our 2016 earnings forecast would be cut by 67-73%,  which would imply a Y-o-Y decline of 62-70%.   The disclosure made no mention of the expected impact of the ban on local cultivation of animal fodder (requiring companies to import 100% of feed needs by 2019), which we anticipate could be sizable for Nadec given that the company only imports c30% of its animal feed needs (versus c70% for Almarai). However, the government is still in a 90-day consultative period so the impact of that change will likely be announced at a later point.   Earlier, Almarai had announced cSAR500mn (includes SAR200mn from the ban on local animal fodder cultivation) in expected costs (SAR200mn mainly from higher fuel prices on its diesel use and SAR100mn from indirect cost hikes). However, the company noted that the estimates were based on worst-case scenario analysis (which we believe is also applicable for Nadec). Applying the expected cost hikes to our forecasts for Almarai (with no improved efficiencies) implies a flattish bottom line for 2016. Given the sizeable impact on dairy companies, there is increasing speculation that dairy prices may be increased in a long overdue move, given that the last upward revision was in 2008 (2000). However, there has been no official word on the matter. (Nada Amin)   NADEC: SAR23.63 as of 11 January 2016, Rating: Buy, FV: SAR39.50 per share, MCap: USD485 million, NADEC AB / 6010.SE