Saudi Kingdom Holding's Q2 profit plunges 83%

Kingdom Holding Co, the investment firm owned by Saudi Prince Alwaleed bin Talal, on Tuesday posted an 82.8-per-cent drop in second quarter net profit on the turmoil hitting global markets. The firm had net profit of SR92.1 million ($24.6 million; Dh90 million) in the three months to June 30, down from SR534.7 million a year earlier, Kingdom Holding said in a statement posted on the Saudi bourse's website. It attributed the drop to lower dividends from local and foreign stock market investments, a weaker operational performance of its hotel business and losses from the sale of shares in Saudi lender Samba Financial Group and food firm Savola. Kingdom, which holds a stake in Citigroup, has cut to below the 5 per cent liable for public disclosure its stakes in Savola and Samba which stood last year at 10.1 and 5 per cent respectively. It did not say if it had any stock left in any of the two companies. Kingdom made unspecified gains from the sale of a stake in a hotel in Geneva and land sales in the Saudi cities of Jeddah and Riyadh. Operating profit was down 70.6 per cent at SR195.7 million in the quarter and based on previous earning statements its second-quarter earnings per share was SR0.01 versus SR0.08 a year earlier. The firm noted that an external auditor expressed "reservations" about its stock investments categorised as available for sale, reiterating a statement made in April. "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. Earlier in July, the firm reported that the value of investments available for sale stood at SR4.46 billion by the end of June and that the unrealised losses stood at SR17 billion. At the end of March, the value of Kingdom's investments available for sale stood at SR3.73 billion down from SR30.71 billion a year earlier, according to audited statements published on the bourse's website. Local investments available for sale amounted to SR820.6 million at the end of March down from SR7.39 billion a year earlier. Foreign investments available for sale were SR2.91 billion down from SR23.32 billion at the end of March, 2008, according to the statements. The value of the company's investments available for sale lost SR12.26 billion at the end of December 2008, it said. Alwaleed has said little this year about his stake in Citigroup, which accounted for more than 40 per cent of the total value of Kingdom Holding's assets when the latter was selling shares to the Saudi public in July, 2007. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .