Porto Group (Porto) reported its financial and operational results for 3Q16. Contracted sales was strong (EGP937mn), driven by strong secondary home sales, bringing 9M16 contracted sales to EGP2.0bn. Reported numbers were decent, with revenue meeting our estimate and inching up 5% Q-o-Q and EBIT beating our estimate by 23% on lower operating costs. Net income beat our estimate by a wide range, on higher-than-expected EBIT margin and more significantly on the reversal of the minority charges, which were booked last quarter. We shall revise both our numbers to reflect the better-than-expected set of results.   Key positives: Strong contracted sales figure for 3Q16, coming in at EGP937mn in 3Q16, with secondary homes sales contributing the highest (53% to total), followed by primary home sales (34%), while commercial units contributing the rest (12%). 9M16 contracted sales totaled EGP2.0bn, of which 53% were contributed by primary homes, 31% by secondary homes, while the remaining 16% by commercial units Revenue met estimate, coming in at EGP242.7mn, and showing a 5.1% Q-o-Q rise. 9M16 revenue totaled EGP664.8mn (2016e: EGP953.9mn)   EBIT margin recovered sequentially to 13.3% (2Q16: 7.9%, EFGe: 11.0%) on rationalised S,G&A expenses Net income beat on lower-than-expected operating costs and reversal of minority charges. 3Q16 net income came at EGP46.2mn (2Q16: EGP0.2mn in net loss, EFGe: EGP22.2mn). 9M16 net income totaled EGP74.5mn (Company disclosure, Mai Attia, Sara Boutros)   Porto Group: EGP0.24 as of 01 November 2016, Rating: Neutral, FV: EGP0.27 per share, MCap: USD118mn,  PORT EY / PORT.CA