Kingdom Holding sees profits fall 83% in one year

Saudi-based Kingdom Holding Co has announced first-quarter net profit fell sharply year-on-year on lower dividend income, while an external auditor expressed "reservations" over its investments.

The firm, in which billionaire Prince Alwaleed bin Talal holds a 95 percent stake, made SR50.2m ($13.4m) in the three months to March 31, down 83.4 percent from SR303.8m a year earlier, it said in a statement.

The profit marks a large swing from the $8.26bn net loss it posted in the fourth quarter, due to a decline in the value of its assets.

In January, Saudi newspapers quoted Alwaleed, a nephew of King Abdullah, as saying he was reviewing his investment portfolio following the fourth-quarter loss.

In an Arabic-language earnings announcement on the Saudi bourse website on Tuesday, the company said an external auditor had expressed reservations about its stock investments categorised as available for sale.

The statement did not elaborate and a Kingdom spokesperson could not immediately be reached for comment.

The statement said Kingdom, which holds a stake in Citigroup, believed the provisions were adequately assessed based on expert projections of the future price performance of its holdings.

"The firm believes that the financial data and analyses concerning the assumptions and projections for the future price performance of these investments, which were compiled by international experts, were sufficient to assess the size of provisions that needed to be made," it said.

In an English statement emailed to Reuters on Tuesday, Alwaleed said Kingdom's earnings were stabilising but made no mention of the provisions.

"I feel confident that KHC's financial results have stabilised during this quarter and, with its strong balance sheet, the company is in a favorable position to identify good investment opportunities and we expect a continuation of this for this year," Alwaleed said.

Alwaleed has said little in recent months about his company's stake in Citigroup, which accounted for more than 40 percent of the total value of Kingdom Holding's assets when the latter was selling shares to the Saudi public in July, 2007.

Kingdom attributed its first-quarter decline in profit to falling dividends from its holdings on international and local markets and weaker performance in the hotel and hotel management sector globally.

Kingdom said it had also made losses from the sale of shares in Samba Financial Group and Saudi Savola Group but made some gains by selling assets, including its share in a hotel in Geneva and some land in Jeddah.

Kingdom said last month it made around $60m in cash from the sale of its stake in a Four Seasons hotel in Geneva. (Reuters)

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