Indofood Sukses Makmur (INDF) booked net income of Rp1.7t in 9M15 which fell 45.2% yoy from Rp3.1t in 9M14. 3Q15 net income fell 105.5% qoq from Rp861b in 2Q15 and had INDF reporting a net loss of Rp47b in 3Q15. Based on a five-year average, the company’s 9M net income usually represents 77% of its full-year net income. However, 9M15 net income fell significantly below our and market expectations, accounting for only 53% and 45.3% of our and the market’s full-year forecasts. The weak 9M15 net income was due to: a) flat sales growth of 1.5% yoy from Rp46.9t in 9M14 to Rp47.6t in 9M15, b) the increase in operating expenses which grew 6.8% yoy from Rp7.3t in 9M14 to Rp7.9t in 9M15, c) significant 165% yoy increase in financing costs from 1.1t in 9M14 to Rp3.0t in 9M15, and d) a higher net loss in associate entities which expanded 5.9x from Rp41b in 9M14 to Rp283b in 9M15.