CARE reported its preliminary 4Q16 results, showing a net loss of SAR71mn compared to net profit of SAR35mn in 4Q15 and our estimate of recurring net profit of SAR40mn. The loss came from booking several impairments and losses (including SAR20mn impairment post a settlement with two major clients, SAR10mn provision for receivables for retail clients, higher for doubtful receivables for government authorities due to delays/difficulties in collection-amount not disclosed, SAR47mn provision for anticipated rejections of claims from some large clients and insurance companies – the company said some of these items will not affect the cash flow as well as higher medical service and finance costs.   On the operational level, the results were weak. Revenue fell 14% to SAR190mn (20% below estimate); a sustained trend since 3Q16. Gross profit came in at SAR4mn compared to SAR50mn in 4Q15 and the company reported net operating loss of SAR48mn vs. net operating profit of SAR34mn in 4Q15. It is difficult to calculate 4Q16 KPIs on a recurring basis due to the lack of clarity on total provisions and impairments booked. We highlighted before that government receivables is a major risk for CARE; however, it comes as a surprise that the company is booking provisions and impairments related to other clients as well. (Company disclosure, Tarek El-Shawarby, Adham El Badrawy)   National Medical Care: SAR62.48 as of 19 January, Rating: Neutral, TP: SAR65.00/share, MCap: USD747mn, CARE AB / 4005.SE