Net profit (loss) after minority: Net loss OMR1.96mn, vs. net loss of OMR3.9mn in 2Q15, net profit of OMR0.44mn in 1Q16, OMR0.7mn EFGe Operating profit: OMR9.2mn, -22% Y-o-Y, -22% Q-o-Q, -11% EFGe Revenue: OMR51.5mn, -13% Y-o-Y, -9% Q-o-Q, -7% EFGe   Renaissance Services (RNS) reported weaker-than-estimated results in 2Q16, with a net loss after minority interest of OMR1.96mn (vs. a net loss of OMR3.9mn in 2Q15, net profit of OMR0.44mn in 1Q16) that came in significantly below our net profit estimate of OMR0.7mn. The company reported operating profit of OMR9.2mn (-22% Y-o-Y, -22% Q-o-Q, -11% vs. EFGe). Revenue came in at OMR51.5mn during the quarter (-13% Y-o-Y, -9% Q-o-Q) and came in 7% below EFG estimate. RNS reported weaker-than-expected group level operating margin of 18.0% (-190bps Y-o-Y, -310bps Q-o-Q, -70bps EFGe), which we believe could be due to weaker-than-expected vessel utilisation level and/or lower day rate.   Higher minority interest further dents earnings. RNS reported minority interest of OMR1.9mn, which came significantly above our OMR0.7mn estimate and led to a wider earnings miss. Interest cost of OMR7.1mn during the quarter (+5% Y-o-Y, +6% Q-o-Q) and tax provision of OMR2.0mn were in line with our estimates. Segment-wise data for Marine and Contract segments are not yet available.   Our view: Overall, a weak set of operational figures, but was not a complete surprise for us, as we were expecting slowness, albeit at a lower rate. Even though the details are not yet available, we highlight our previous assumptions that might have led to weak operating numbers: i) weak vessel utilisation in MENA sequentially and pressure on day rates; ii) impact from BP contract renewal that started to reflect from 2Q16, which might have put pressure on day rates in the Caspian; and iii) potential one-off cost related to vessel redeployment to Caspian.   We had estimated an 8% decline in FY16 operational profit Y-o-Y, which would be further challenged by the weaker-than-estimated 2Q operational figures. Nevertheless, our key immediate concerns on RNS still remain: i) even though oil price recovered from its early lows, the price is still 50% below when RNS commenced most of its long-term contracts, which would challenge its long-term contract day rates in 2016 and beyond; ii) the equity dilution from the Mandatory Convertible Bonds (worth OMR2.7mn in August 2016); and iii) initial cost impact from Duqm PAC project (expected to be operational by 2H16). (Earnings release, Sameer Kattiparambil)   Renaissance: OMR0.29 as of 14 July 2016, Rating: Sell, FV: OMR0.19 per share, MCap: USD208mn, RNSS OM / RSC.OM