        Revenues: EGP252mn, +6.3% Y-o-Y, +1.5% M-o-M
        EBITDA: EGP167mn, -0.4% Y-o-Y, +3.6% M-o-M 
        Net income: EGP177mn, -0.8% Y-o-Y, +7.3% M-o-M 
 
Alexandria Containers (ALCN) reported its financial results for October, with net income amounting to EGP177mn (-0.8% Y-o-Y, +7.3% M-o-M). The improvement seen in ALCN’s numbers was driven mainly by a stronger top-line performance as the company booked EGP252mn in revenues (+6.3% Y-o-Y, +1.5% M-o-M). This operational improvement on the top-line came on the back of robust throughput activity as the company handled 82.6k TEUs in October (+10% M-o-M), and despite a drop in revenue per TEU to USD173 (from an average of cUSD187/TEU in September). Although revenue/TEU was weaker M-o-M, EBITDA reached EGP167mn, with EBITDA margins expanding c125bps to c66.5% (vs. c65.2% in September). This margin expansion was mainly driven by savings in: i) rent; ii) salaries; and iii) raw materials. 
 
Our take on the results: Overall, the numbers posted in 4Q18 so far imply that ALCN will miss our EGP2.3bn estimate for the year. However, our estimates are driven by an expectation for higher volumes in 2H18/19 vs. the current run rate as: 
        further capacity will be unlocked, following the conclusion of maintenance work at the docks; 
 
        ALCN’s main competitor in the port is operating at full rates and is unlikely to capture new volumes; and
 
        Egyptian trade numbers continue to improve. 
 
Any delays in finalising the maintenance activities (by December/January) and a continuation of the current run rate pose an 11% downside risk to our EPS estimates. On valuation, we continue to think that ALCN trades at attractive 2018/19e P/E multiple of only c9x (c10x if downside case materialises), while we conservatively see a c7.3% EPS CAGR potential from 2019-23. 

Ahmed Hazem Maher, Alaa Saleh
 
Alex. Containers and Goods: EGP14.90 as of 18 Nov. 2018, Rating: Buy, TP: EGP22.50/share, MCap: USD1,238mn, ALCN EY/ALCN.CA