4Q2015 results highlights: Net profit (loss) before minority: net loss OMR29.4mn vs net profit of OMR8.3mn in 4Q14, OMR1.3mn in 3Q15, OMR1.5mn EFGe. operating profit: OMR13.6mn (-23% Y-o-Y, flat Q-o-Q) +10% EFGe; revenue: OMR56.8mn (-15% Y-o-Y, -8% Q-o-Q) -5% EFGe.   Renaissance Services (RNS) reported weaker-than-estimated 4Q2015 net loss before minority interest of OMR29.4 million (versus net profit of OMR8.3 million in 4Q2014 and OMR1.3 million in 3Q2015), a wide miss on our net profit before minority estimate of OMR1.5 million. The company reported an operating profit of OMR13.6 million (-23% Y-o-Y, flat Q-o-Q, +10% versus EFGe). Q4 revenue was OMR56.8 million (-15% Y-o-Y, -8% Q-o-Q), 5% below our estimate. RNS booked provisions worth OMR32.0 million during the quarter, which overshadowed what was otherwise a stable operational quarter considering the current industry backdrop, and led to a wider-than-expected net loss during the quarter. The provision includes OMR27.4 million asset write-off from its marine division and OMR4.7 million related to increase in derivative liability, with regard to Standard Chartered Private Equity investment. The provision will wipe out 11% of equity value (inclusive of minority and perpetual note) and would be a major overhang on debt covenants, in our view.   Segment breakdown is not available for Marine and Contract segments, but we believe the marine segment was broadly stable in Q4 (Q-o-Q), in terms of revenue and margins, which led to the operational beat. Finance charges of OMR6.5 million during the quarter were much lower Y-o-Y (-25%) and our estimate of OMR8.6 million (-24%), and reduced the impact of net loss.   Our view: Overall, a strong set of operational figures. However, significantly higher provisions will challenge its debt covenants, in our view and would be a major overhang on its balance sheet. In a continued lower oil price scenario, we would not rule out the potential for further provisioning, which could further dent the equity value; hence, we believe the share price will be under pressure and remain volatile in the short term. (Company, Sameer Kattiparambil)