Net profit : SAR173.4mn, -53% Y-o-Y, -30% Q-o-Q, -44% vs. EFGe Revenue: SAR5.85bn, +4% Y-o-Y, -15% Q-o-Q, +6% vs. EFGe Gross profit: SAR1.16bn, -7% Y-o-Y, -10% Q-o-Q, -16% vs. EFGe Operating profit: SAR311.3mn, -37% Y-o-Y, -25% Q-o-Q, -37% vs. EFGe   Savola Group reported its 3Q16 KPIs, with earnings remaining on a downtrend for the seventh quarter straight, falling 53% Y-o-Y and missing our estimate by 44% on lower margins, as well as higher net interest costs (including FX losses), share of loss from United Sugar Co. Egypt (USCE; now deconsolidated and treated as a discontinued operation) and minority interest charges. Savola announced in March 2016 that the European Bank for Reconstruction and Development (EBRD) would invest USD100mn in USCE, bringing down Savola’s effective stake to 33.0% from 61.5%, with the results of USCE restated as income from discontinued operations until regulatory requirements are met, and the new shares are issued to EBRD. Accordingly, all figures were restated. Revenue rose 4% Y-o-Y to SAR5.85bn (+6% vs. EFGe), likely driven by higher retail revenue, as food top-line was likely challenged by FX (mainly EGP) and low commodity prices. Gross profit fell 7% Y-o-Y (-16% vs. EFGe), mainly due to lower retail margins. Headline gross margin was down c2.3pp Y-o-Y. Operating profit (including associate and investment income) fell a larger 37% Y-o-Y (-1% vs. EFGe), mainly due to a surge in SG&A costs related to Panda’s aggressive store expansions, as well as the opening of a new distribution center in the Western province.   The company's BoD approved the distribution of a DPS of SAR0.25 (SAR133.5mn) for 3Q16, in line with our estimate and the run rate in the prior two quarters (that broke the customary quarterly run rate of SAR0.5). The dividend implies an annualised DPO of 78% and an annualised dividend yield of 3.4%. The ex-dividend date is 24 October, 2016 and distribution date is 6 November 2016.   Another disappointing set of numbers that confirms our cautious stance on the name, and that earnings recovery is still far, especially given limited visibility on Panda’s earnings recovery and sustained sugar losses due to weak global market dynamics and EGP devaluation. We remain Neutral on the stock. (Earnings release, Hatem Alaa, Nada Amin)   Savola: SAR29.08 as of 19 October 2016, Rating: Neutral, FV: SAR40.00 per share, MCap: USD4,141mn, SAVOLA AB / 2050.SE