EK Holding reported financial highlights for 4Q2015, showing earnings at only USD3.2 million (-42% Q-o-Q) and missing our estimate by a wide margin (-58% versus EFGe). Full financial statements have yet to be released, but the key highlight of the release was massive restatements in 2014 financial results, which management confirmed to us to be one-off impairments for its E&P operations. We also received confirmation from EK's management that TOE, in 4Q2015, was faced by one-off provisions that ate away at earnings further and likely drove the miss from our estimate.   EK Holding's 4Q2015 financial results were full of disappointments from i) restatements; ii) one-off provisions; to iii) weaker price environment. We think that the oil segment in particular was the hardest hit and will remain so in the near term, as oil prices dropped even lower in 1Q2016 to a low of USD28/bbl. We also note that nitrogen fertiliser prices have dropped to a 12-year low, which is expected to eat away considerably at margins, especially if our view of higher gas prices in Egypt materialised. On the other side, operations at Sprea and Natenergy remain healthy, as earnings continue to be supported by a positive operating environment, and as capacity additions will drive further growth.   Overall, we will be reviewing our forecasts to reflect the disappointing set of results posted in 4Q2015, as well as the weak outlook for oil and fertiliser prices, but we remain positive on the company's strong balance sheet and rich net cash position, which should allow it to weather the storm; hence, we maintain our Buy rating on the stock and believe the market has discounted operations significantly.      Fertilisers and chemicals segment: For the fertilisers segment, the full return of flow of natural gas to Alexfert since November allowed the company to return to operations (operating rates came at 45% versus 11% in 3Q2015) and came back into the green, following a number of depressing quarters. Despite this positive development, the company was met by weakening urea prices in 4Q2015 (Urea: -10% Q-o-Q), which continued to soften further in 2016 (-14% YTD). At Sprea, the company began to reap some benefits of the return of local urea manufacturers to the market, with demand for its form/urea compound expanding in 4Q2015 and through to 1Q2016. The company also announced that the new SNF expansion came online in 1Q2016, earlier than our expectation for mid-2016.     Energy and energy-related segment: At TOE, while production levels improved (+20% Q-o-Q), earnings were weighed on by i) a drop in net realised oil prices (-8% Q-o-Q); ii) one-off provisions to the tune of USD2.2 million; and iii) higher-than-expected SG&A expenses. Despite the weak oil price, the S. Sudanese operation continues to generate positive cash flows. However, the company is still expected to struggle in this environment as debt servicing eat away at margins. At Natenergy, the company managed to achieve a sizable improvement in its customer additions to 38,200 customers in 4Q2015 (+68% Q-o-Q) and continues to grow its business   Dividend cut; Below EFGe: The BoD of EK Holding also recommended the distribution of a cash dividend of USD0.0125/share, which implies a dividend yield of 2.8% and a pay-out ratio of 35%. This dividend recommendation comes significantly below our expectation of a roughly flat DPS Y-o-Y at USD0.026/share. Despite the weak environment, we believe the company can easily raise its DPS payment, given its inflated net cash position. (Company disclosure, Ahmed Hazem Maher)