Indofood CBP Sukses Makmur (ICBP) reported net income of Rp2.4t in 9M15 which grew by 16.3% yoy from Rp2.1t in 9M14. Its 3Q15 net income had declined by 25% qoq from Rp942b in 2Q15 to Rp706b. Given that 9M net income typically contributes to 78% of its full-year net income, the company’s 9M15 net income met our and market expectations and accounted for 77% and 79% of the respective full-year forecasts. Revenue increased by 5.8% yoy from Rp22.8t in 9M14 to Rp24.1t in 9M15. Flat growth in cost of goods sold (COGS), up by 0.07% yoy from Rp16.69t in 9M14 to Rp16.70t in 9M15, driving 9M15 gross profit up by 21.4% yoy from Rp6.1t to Rp7.4t. Despite the strong 394bp improvement in gross margin, 9M15 net income margin only improved by 92bp as: a) selling and distribution cost and G&A expenses increased by 23.2% yoy and 10.0% yoy respectively, leading to operating margin expansion of only 187bp, b) financing costs were up by 86.5% yoy from Rp161b in 9M14 to Rp301b in 9M15.