Net income – AED58mn, +1% Y-o-Y, -18% Q-o-Q, -17% vs. EFGe Recurring earnings – AED67mn, -14% Y-o-Y, +2% Q-o-Q, -2% vs. EFGe Revenue – AED736mn, -1% Y-o-Y, -2% Q-o-Q, -6% vs. EFGe Gross profit – AED261mn, +1% Y-o-Y, +16% Q-o-Q, -2% vs. EFGe Net operating profit – AED71mn, -5% Y-o-Y, -25% Q-o-Q, -7% vs. EFGe   RAK Ceramics announced its preliminary 1Q16 headline figures, showing recurring earnings drop of 14% Y-o-Y (in line), driven mainly by i) 5% Y-o-Y drop in EBIT; ii) 40% increase in net interest expense; iii) increase in minority interest. Please note that recurring earnings exclude i) FX gains /(loss); ii) profit on disposal of equity accounted investees; iii) profit on fair valuation for equity accounted investees; and iv) impairment-provisions and revaluation. Reported earnings increased 11% Y-o-Y. Revenue was flat Y-o-Y at AED736mn (-6% vs. our estimate), as core revenues growth of 3% Y-o-Y to AED645 mn, led by the tiles segment, was offset by a 23% decrease in non-core revenues to AED91mn. The core revenue was driven mainly by i) UAE sales (+6% increase Y-o-Y), mainly from sales in the GCC (+9%), offsetting the weak sales in KSA; ii) +7% from Bangladesh; and iii) +c8% from Europe, offsetting the 18% drop in India sales. Gross profit (excluding depreciation) was flat Y-o-Y at AED261mn (in line), while normalised EBITDA, on the other hand, was down 10% Y-o-Y to AED115mn (-10% vs. our estimate) on hike in adjusted SG&A (-7% Y-o-Y, exclude impairments in 1Q15) due to an increase in staff cost, normalised EBITDA margin contracted 150 bps Y-o-Y to 15.6%. EBIT decreased 5% only due to lower depreciation.   We will likely tweak our forecast post 1Q16 results to reflect the mismatch at the EBIT level, and to reflect global demand trends. (Earnings release, Tarek El Shawarby)