        Revenue: SAR174mn, -14% Y-o-Y, -18% Q-o-Q,  +2% vs. EFGe
        Gross profit: SAR27.3mn, 0% Y-o-Y, -34% Q-o-Q,  0% vs. EFGe
        Operating profit: SAR-31.2mn, -19% Y-o-Y, -1% Q-o-Q,  +5% vs. EFGe
 
Al Hassan Ghazi Ibrahim Shaker reported 3Q18 headline losses (eighth consecutive quarter) of SAR44.9mn, slightly lower than last year’s SAR49.2mn (EFGe: SAR43.2mn), mainly as revenue continued to tumble, and losses from associates (mainly 49%-owned JV LG Shaker) increased to SAR6.5mn this year. Revenue fell 14% Y-o-Y (+2% vs. EFGe) due to intense competition and slower demand for ACs as a result of continued slow construction activity (weak residential sales) and a declining population (due to expat departures). The company exhibited solid cost controls as gross margin expanded c2.2pps Y-o-Y to 15.7% (EFGe: 16.0%), with gross profit coming in flat YoY and in line with our estimate. Meanwhile, the company reported a negative EBIT of SAR31.2mn (vs. SAR38.7mn last year and our negative EBIT estimate of SAR29.8mn) as the decline in SG&A costs (-7% Y-o-Y) was less than revenue. 
 
Another weak set of results – while there are some positive steps taken on the cost front, they are not enough to offset the weak top-line. We have a Sell rating on Shaker until revenue resumes growth (low visibility, given slow discretionary spending and a weak real estate market in KSA) and large working capital risks, given high inventory levels and long receivable collection periods. 
 
Shaker: SAR8.30 as of 05 Nov 2018, Rating: Sell, TP: SAR8.70/share, MCap: USD139mn, SHAKER AB/1214.SE
Hatem Alaa, Nada Amin, Seif Rageh