Recurring net income – SAR22mn, -80% Y-o-Y,  +226% Q-o-Q, -68% vs. EFGe Revenue- SAR458 mn, -12% Y-o-Y, +22% Q-o-Q, , -16% vs EFGe Gross profit – SAR230mn, -14% Y-o-Y, +35% Q-o-Q, -9% vs. EFGe Recurring net operating profit – SAR51mn, -50% Y-o-Y, +51% Q-o-Q, -28% vs. EFGe   SPIMACO reported its preliminary 4Q16 results, reporting a net profit of SAR212mn, driven by a SAR248mn capital gain on the sale of 7mn shares of Yansab (AFS investments. It also booked an FX loss of SAR58mn due to EGP weakening (it announced in November 2016 that the EGP float would have an estimated negative impact of SAR40mn in 4Q16, the rate weakened further thereafter); SPIMACO exports to Egypt and also owns 51% of Egypt-based Meivo International for pharmaceutical Industries.   Recurring earnings (excluding capital gain and FX loss) came in at SAR22mn, significantly lower Y-o-Y and well below our estimate, driven by a 12% drop in revenue to SAR458mn (partly on weaker revenue from Egypt, in our view), higher SG&A expenses due to consolidating Al Qassim Medical Services, higher R&D and financing costs as well as higher loss from associates. Gross profit fell broadly in line with revenue to SAR230mn as the GPM was maintained at 50%. Recurring EBIT (excluding FX loss) fell 50% Y-o-Y to SAR51mn and the EBIT margin contracted to 11% (-8pp Y-o-Y). The EBIT margin has been negatively affected by the consolidation of Al Qassim Medical due to its high SG&A expenses. We also do not rule out the booking of pre-operating expenses ahead of launching its new factories in Qassim and Dammam that are scheduled to start operations in 2017. (Company disclosure, Wafaa Baddour, CFA, Adham El Badrawy)   SPIMACO: SAR36.88 as of 18 Jan 2017, Rating: Neutral, TP: SAR42.00 per share, MCap: USD1,180mn, SPIMACO AB / 2070.SE