Net income – SAR7mn, -77% Y-o-Y, -87% Q-o-Q, -67% vs. EFGe Gross profit – SAR170mn, +30% Y-o-Y, -30% Q-o-Q, +2% vs. EFGe Net operating profit – SAR22mn, -11% Y-o-Y, -60% Q-o-Q, -37% vs. EFGe   SPIMACO reported its preliminary 3Q16 results, showing earnings drop of 77% Y-o-Y to SAR7mn (67% below our estimate), despite strong growth in revenue (+22% to SAR375mn) and gross profit (+30%, margin up 3pp to 45.3%) that came in line with our estimates. The company attributed the drop in earnings mainly to: i) higher SG&A, partly due to consolidating Al Qassim Medical Services, which resulted in an 11% decline in EBIT and a 2pp contraction in margin to an eight-year low of 6%; ii) absence of dividend income from the company’s investments (vs. SAR11mn in 3Q15); iii) an increase in finance costs (SAR5mn vs. SAR1mn in 3Q15); and iv) an increase in the share of loss from associates. The company noted that the consolidation of Al Qassim reflected positively on SPIMACO’s operational profitability, which was more visible on the GP level. (Earnings release, Tarek El-Shawarby, Adham El Badrawy)   SPIMACO: SAR29.02 as of 18 October 2016, Rating: Buy, FV: SAR45.00 per share, MCap: USD929mn, SPIMACO AB / 2070.SE