4Q15 Results Highlights: Net income – EGP81mn, -10% Y-o-Y, -40% Q-o-Q, -29% vs. EFGe; Gross profit – EGP249mn, +1% Y-o-Y, 0% Q-o-Q, -8% vs. EFGe; Net operating profit – EGP105mn, -5% Y-o-Y, -31% Q-o-Q, -21% vs. EFGe   The full year results were in line with our estimates; we hence maintain our positive view on EIPICO, given its solid growth prospects, capitalising on ample capacity post the rollover of the new plant in 1H2013, as well as focus on export markets.   Egyptian International Pharmaceutical Industries Company (EIPICO) reported its 4Q2015 results, showing an earnings decline of 10% Y-o-Y to EGP81 million (-29% versus our estimate), mainly due to higher SG&A expenses and provisions Y-o-Y. The miss versus our estimate is driven by lower than expected revenue (-6%, mainly export driven), higher depreciation (+21% vs estimate) and provisions.   Modest Y-o-Y sales growth: Total revenue inched-up 4% Y-o-Y to EGP406 million, (6% below our forecast). Local sales was up 8% Y-o-Y (+3% versus our estimate) offsetting the 15% Y-o-Y drop in export sales (-34% vs estimate), which was the lowest quarter in 2015. FY2015 export sales is contributing to 21% of total revenue versus 20% in 2014. Margin softening on high SG&A: Gross profit was flattish Y-o-Y (+1%) as revenue growth was partially offset by higher COGS leading to 150 bps Y-o-Y decrease in gross profit margin to 61.2% (-150 bps versus our estimate), while EBITDA decreased 5% Y-o-Y (-13% vs estimate) on higher SG&A (+14% Y-o-Y), leading to 3.4 pp contraction in EBITDA margin to 38.6% (-3.1 pp versus our estimate).   The Board of Directors (BoD) has recommended a cash dividend of EGP3.50/share, above last year’s DPS of EGP3.30 and in line with our DPS forecast. The proposed dividend implies a payout ratio of 78% and a yield of c6%. (Company, Tarek El Shawarby)   EIPICO: EGP58.67 as of 13 March 2016, Rating: Buy, FV: EGP104.00 per share, MCap: USD594 million, PHAR EY / PHAR.CA