Alkaloid reported net consolidated profit of MKD 120.3m for 3Q09, up 5.1% q/q and 64.5% y/y. The result was 31.9% below our forecast due to weaker-than-expected sales in the period. The company recorded 15.3% y/y sales growth for 9M09. The stock currently trades at MKD 5,744 per share (2009F P/E of 12.1x), well below our fair value estimate. Total sales came in at MKD 1,298.0m for 3Q09, down 0.3% q/q but up 2.1% y/y on the back of a sharp increase in domestic sales. Alkaloid posted 28.01% y/y growth in domestic sales for 9M09 and 7.8% growth in international sales. Total operating revenues came in 15.0% below our quarterly forecast. Alkaloid’s exposure to the domestic market increased slightly from 37.3% in 9M08 to 41.4% in 9M09. EBIT came in at MKD 150.1m for 3Q09, up 7.0% q/q and 47.3% y/y, underperforming our forecast by 27.2%. Alkaloid’s EBIT margin improved to 11.6% in 3Q09 versus 8.0% in 3Q08 and 10.8% in 2Q09 on the back of significant reductions in personnel costs and lower material and energy costs. Net financial result came in at a MKD 14.8m loss in 3Q09, up 26.2% q/q and 0.2% y/y. The firm’s net financial result beat our forecast by 49.0%, probably due to higher-than-expected gearing in the period. The Macedonian currency remained relatively stable against regional currencies and the euro in 3Q09.