HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Chairman of Kingdom Holding Company (KHC) announced the Company’s financial results of operations for the second quarter and the six months ended June 30, 2008.
The consolidated net income for the second quarter of 2008 of SR 534.7 million increased by 21.8% when compared to the results for the second quarter of 2007. The consolidated net income for six months totaled SR 838.5 million and resulted in an increase of 15.1% when compared to the same period in 2007.
The decline in the distribution of foreign dividends was offset by the increase in dividends domestically. The hotel operations, for both the Company’s owned and managed hotel properties, continued to operate within targeted expectations. Improving domestic operations contributed positively to the current results.
The Company recorded a decline in its portfolio carrying value due to the turbulent world financial markets. It should be noted however that recent recovery of the stock market in the United States resulted in a favorable impact on the Company’s Net Asset Value in excess of SR 2 billion. During the quarter, the Company continued to pursue the development of its two real estate projects in Jeddah and Riyadh, subscribed to the rights offering in Tasnee (SR 80 mil), purchased additional shares in Saudi Research and Marketing Group (SR 188 mil). In addition, the Company increased its investment in NAS by approximately SR1.3 billion.
The Company successfully concluded a financing arrangement and is in the process of negotiating other facilities to take advantage of several opportunities that are available to it. Due to the Company’s low leverage, it is in an excellent position to borrow on favorable terms.
Mr. Talal AlMaiman, Executive Director of Development and Domestic Investment is very encouraged by the prospects of the two real estate development projects in Jeddah and Riyadh and others. “We are very excited about our projects in Jeddah and Riyadh. The Jeddah project has received so much publicity and it truly deserves it. Roll-out plans are expected to be announced before the end of the current year, and it will exceed everyone’s expectations.”
Shadi Sanbar, KHC’s CFO and a member of its Investment Committee, believes that despite the reduction in the Company’s Net Asset Value, the balance sheet remains strong and the Company’s ability to continue to use leverage at attractive rates is a clear competitive advantage in supporting the Company’s growth plans.
HRH Prince Alwaleed, the Chairman was pleased with the second quarter results, which showed an increase of almost 22% over last year, and felt confident that the outlook for the Company is very positive. The Chairman added, “Although these have been difficult times for the world financial markets, the strength of Kingdom Holding and its executive team remains sharply focused on identifying opportunities that will maximize shareholder value, both in terms of current returns and long term value.”
Kingdom Holding Company (KHC) Chaired by HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, is a publically traded company which was listed on Tadawul (the Saudi Stock Exchange) in 2007. KHC is one of the world’s most successful and diversified business organizations, highly respected in the field of investments and recognized as an elite player in the Arabian Gulf region and internationally. KHC was founded in 1980 where initially the Company focused on construction activities, housing development and educational projects. Today, KHC’s portfolio has its main interest in landmark hotel properties and hotel management companies, real estate development, financial services, technology and media.
Landmark hotel properties include the George V in Paris, Des Bergues in Geneva, the newly renovated Fairmont Plaza in New York City and the Savoy (under renovation) in London, in addition to the Fairmont in San Francisco, Four Seasons in Toronto and Raffles in Singapore. Other hotels are owned though its majority-owned Dubai listed subsidiary, Kingdom Hotel Investments.
Hotel Management Companies include the following world-renowned brands: Four Seasons Hotels & Resorts, Fairmont Raffles Hotels (which include Fairmont, Raffles and Swissotel) and Mövenpick Hotels & Resorts.
KHC has two significant real estate developments, one in Jeddah aggregating 5 million sqm and the other in North of Riyadh aggregating 15 million sqm.
KHC also has stakes in other Saudi publicly traded companies in the various sectors which include banking through Samba, food via Savola, industrial through Tasnee and media and publishing via Saudi Research and Marketing Group. Other KHC domestic investments include retail, healthcare and aviation through the National Air Services Company Limited (NAS).
Moreover, the company`s international investment portfolio contains many blue-chip companies including Citigroup, News Corporation, Time Warner, Songbird Estates (Canary Wharf, London), Apple Inc, Motorola, Walt Disney Co and Eastman Kodak. In addition to its public company activities, KHC is also extremely active in the area of private equity in Saudi Arabia and developing markets within the Middle East, Africa and Asia.