Saudi Marketing Company (Farm Superstores) [4006.SE] posted KPIs for 1Q2016, with a net income of SAR25.5 million, declining 12% Y-o-Y (+31% Q-o-Q) on increased store operating costs (including SAR1.5 in higher expenses due to electricity and maintenance), as well as for new launches, in addition to elevated SG&A costs due to higher Saudisation levels. Total revenue was up 6% Y-o-Y, reaching SAR482.2 million (including gondola sales of cSAR47 million), as the company operated a total of 57 grocery stores and nine Adventureland locations by end-1Q2016 versus 52 stores and eight Adventureland locations by end-1Q2015. Gross profit for the quarter came in at SAR112.2 million, up 7% Y-o-Y, while gross margin was flattish Y-o-Y (+30bps), coming in at 23.3%. Meanwhile, net operating profit fell 12% Y-o-Y to SAR28.7 million, while operating margin narrowed120bps to 6.0%, as SG&A increased 16%. The company added that it saw a drop in share of profit from associates, booked a provision for doubtful debt of SAR0.6 million, as well as other losses (FX and loss on AFS investment) and SAR3.4 million in one-off income for cancelled unused grocery coupons from previous years. (Company disclosure)