TMG Holding (TMG) reported its headline figures for 3Q16. Contracted sales were good, coming in at EGP1.76bn (+5.0% Y-o-Y, +17.4% Q-o-Q, +3.8% vs. EFGe), bringing 9M16 total contracted sales to EGP5.54bn (+7.0% Y-o-Y). Management indicated that contracted sales completed during the quarter continue to come predominantly from Madinaty, with challenges to secure building permits at Rehab continuing to persist. Reported revenue was relatively weak in 3Q16, coming in at EGP1.0bn (+35.0% Y-o-Y, -41.1% Q-o-Q, -33.7% vs. EFGe). Gross profit was EGP363.9mn (+64.3% Y-o-Y, -37.6% Q-o-Q), translating into a Gross Profit Margin (GPM) of 36.1% (3Q15: 29.7%, 2Q16: 34.1%). Net income was EGP181.7mn (+32.5% Y-o-Y, -19.9% Q-o-Q, -38.0% vs. EFGe). Management attributed the relative weakness in reported numbers to seasonality, on weak deliveries, pressured by one week of Ramadan and two eid breaks. Management indicated that revenue from hospitality has improved Y-o-Y, on better performance by the company’s hotels in Alexandria and Cairo. 9M16 revenue was EGP3.93bn (+7.6% Y-o-Y), gross profit EGP1.30nn (+17.8% Y-o-Y) and net income EGP616.4mn (+15.8% Y-o-Y).   We note that 4Q16 will likely carry an FX loss for TMG, which can be massive, depending on both the FX rate by year-end and the size of non-EGP-denominated debt by end of December. (Company disclosure, Mai Attia, Sara Boutros)   TMG Holding: EGP7.47 as of 10 November 2016, Rating: Buy, FV: EGP10.25 per share, MCap: USD954mn, TMGH EY / TMGH.CA