Revenue – SAR1.72bn, -4% Y-o-Y, -9% Q-o-Q, -6% vs. EFGe Gross profit – SAR704mn, +62% Y-o-Y, -11 % Q-o-Q,-2%  vs. EFGe Operating income – SAR656mn, +72% Y-o-Y, -11% Q-o-Q, +0.1% vs. EFGe Net income – SAR608mn, +101% Y-o-Y, -12% Q-o-Q, +4% vs. EFGe   Yanbu National Petrochemical Company (Yansab) reported its 3Q16 results, showing a moderate fall in earnings Q-o-Q, as expected. Bottom-line earnings were down 12% Q-o-Q, broadly in line with our expectation (+4%). According to the announcement, the fall in earnings Q-o-Q was driven by lower volumes and lower prices (mainly MEG which was down 2%).   While the results were generally in line with our expectations, revenues missed by 6%, likely due to lower-than-expected volumes, but this was offset at the gross profit level by higher-than-expected margins, which -at 40.8%- were 150bps higher than our 39.3% expectation (slightly down vs. last quarter’s 41.9%). While we had expected volumes to be lower in 3Q16, following the very elevated levels we saw last quarter, it appears volumes fell even more than expected, but the numbers imply operating rates were still above 100%. It is not yet clear what drove the higher-than-expected margins.   Overall, a decent set of numbers that was largely in line with market expectations. While the fall in volumes was a negative, we were already expecting that the volume levels from 2Q were not sustainable. We have a Neutral rating on Yansab, as we believe valuations are close to full at current levels, but we continue to like that stock as a defensive play, given its attractive yield (c6%) and strong balance sheet. We also like the company’s oil exposure, which would allow investors to capture any upside in oil prices. (Earnings release, Yousef Husseini)   YANSAB: SAR48.89 as of 12 October 2016, Rating: Neutral, FV: SAR54.00 per share, MCap: USD7,334mn, YANSAB AB / 2290.SE