Revenue – SAR423mn, -11% Y-o-Y, -6% Q-o-Q, -5% vs. EFGe Gross Profit – SAR137mn, -23% Y-o-Y, -7% Q-o-Q, -16 vs. EFGe Operating Income – SAR96mn, -36% Y-o-Y, -5% Q-o-Q, -19% vs. EFGe Net Income – SAR105mn, -13% Y-o-Y, +9% Q-o-Q, -12% vs. EFGe   Sahara Petrochemical Company (Sahara) has just reported its 3Q16 results, with earnings improving Q-o-Q, mainly on a better performance from SEPC and SAAC. Earnings came in below our forecasts (-12%), mainly on a weaker-than-expected performance from Al Waha. We had expected Al Waha’s earnings to improve this quarter on higher PP to propane spreads, but this did not materialise. Gross margins were flat Q-o-Q at 32.5%, but were much lower than our 36.5% forecast. The company noted that the lower earnings Q-o-Q for Al Waha were mainly a function of lower sales volume. Full financials are not yet available, but it appears that below the operational level, earnings were better than expected and saw a solid boost Q-o-Q, mainly on higher volumes and prices at TSOC – the subsidiary that owns SEPC and SAAC. SEPC should have seen an improvement on better pricing and spreads, while SAAC should have seen a decline in their losses as acrylate prices were higher this quarter.   Overall, a decent set of numbers, but Al Waha’s performance was disappointing to us. We are Neutral on Sahara but believe the stock could be a good tactical play in the short term as the company could boost dividends this year to SAR0.75/share (7.1% yield), following the much better earnings so far in 2016 and a healthier balance sheet. (Yousef Husseini)   Sahara Petrochemicals: SAR10.49 as of 17 October 2016, Rating: Neutral, FV: SAR10.50 per share, MCap: USD1,227mn, SPC AB / 2260.SE