Saudi Ground Services (4031.SE) reported 3Q18 results, with earnings down 42% Y-o-Y to SAR92.7mn, on higher operating cost due to the introduction of the cost of living allowance, increase in regulatory expenses, such as the labour office fee and implementation of Ministry of Labour’s requirements, as well as higher fuel and utility costs. The company reported lower zakat expenses by SAR5mn and higher other income. Revenue for the quarter was flat Y-o-Y at SAR700.7mn. Meanwhile, gross margin narrowed 9pp to 23.8%, with gross profit declining 27% Y-o-Y to SAR166.5mn. Operating margin narrowed 11pp to 12.2%, with operating profit down 46% Y-o-Y to SAR85.5mn as SG&A expenses increased 17% Y-o-Y on higher provisions and consultancy fees.