Kingdom Holdings returns to profit as markets recover

HRH Prince Alwaleed bin Talal.

Kingdom Holding Co., the investment company owned by His Royal Highness Prince Alwaleed bin Talal, said third- quarter profit fell 54 percent as the global financial crisis hurt gains from investments and hotel revenue.

Net income dropped to 104.8 million riyals ($28 million) in the three months ended Sept. 30, from 226.5 million riyals in the year-earlier period, Riyadh-based Kingdom Holding said in a statement to the Saudi bourse on Tuesday.

The profit represents a massive turnaround since the fourth quarter of last year when Kingdom Holding reported a loss of almost 31 billion riyals after Citigroup Inc. shares plunged 74 percent in the prior 12 months. Alwaleed is the largest individual investor in Citigroup.

Kingdom’s decline in net income for the most recent quarter was due to a “decrease in dividend distribution from investments in international and local markets,” the company said in the statement.

The performance of the company’s hotels and losses that resulted from selling shares in Samba Financial Group and Savola Group also hurt net income, the company said. It didn’t provide details on what stakes it sold in the two companies.

Kingdom will report “future profit in light of the positive performance of the local and international portfolio,” Prince Alwaleed said in a separate e-mailed statement.

Kingdom’s portfolio increased 37 percent to 6.1 billion riyals in the third quarter, from the second, as the recovery in the global economy “contributed to the improvement in the local and international financial markets,” the company said.

Prince Alwaleed’s assets were valued at $16.3 billion this year, compared with $17.1 billion last year, in the Arabian Business 2009 Saudi Rich List.

Kingdom’s assets are valued at $7.26 billion, while the prince owns $3.18 billion of real estate and $1.56 billion of media assets such as LBC and Rotana Holding, Arabian Business discovered after gaining exclusive access to the financial accounts of both Prince Alwaleed and his companies.

Kingdom is proceeding with two “colossal” real-estate projects in Jeddah and Riyadh, the company said in today’s statement. Kingdom is building the Kingdom Tower in Jeddah, which is planned to be the world’s tallest building at a cost of 100 billion riyals.

The prince built his fortune by investing in brand-name companies he considered undervalued, including Apple Inc., News Corp. and Time Warner Inc. Forbes magazine estimated he was worth $13.3 billion in March, ranking him 22nd among the world’s billionaires.

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