Saudi Kingdom Holding swings to Q4 $41.5M profit
The investment company headed by the Saudi prince who is one of Citigroup's biggest stakeholders said Wednesday it swung to an almost $41.5 million net profit in the fourth quarter of 2009, up from a net loss of $8.27 billion in the corresponding period the prior year.
Saudi Arabia-based Kingdom Holding Co., which is 95 percent owned by Alwaleed bin Talal, a nephew of the Saudi monarch, attributed the 156 million Saudi riyal ($41.5 million) gain to the fact that the fourth quarter of 2008 included compensation provisions for investment losses realized during the brunt of the global meltdown. The firm recorded net losses of almost 31 billion riyals that quarter.
In an e-mailed statement, Alwaleed said the positive results highlight that the company continues "on the path of profitability due to its sound and promising strategic investments locally, regionally and internationally."
Kingdom Holding — and by extension Alwaleed — holds stakes in international giants such as Apple Inc., eBay and News Corp., as well as in hotels and other property ventures.
Alwaleed, who was ranked as the world's 22nd-richest person by Forbes magazine last year, recently transferred at no-cost 180 million of his Citigroup shares to Kingdom Holding, a move aimed at boosting borrowing power in the future. The deal was valued at about $600 million.
In late 2008, the Saudi royal raised his stake in Citigroup to 5 percent, up from under 4 percent, as the U.S. banking giant was facing a possible collapse. Kingdom Holding says Alwaleed is the single largest shareholder in Citigroup.
He met earlier this month with Citi's chief executive Vikram Pandit and said that the "honeymoon is now over" after two years in which the financial institution, like others, struggled with the fallout from the world's worst recession in over six decades.
Citigroup on Tuesday reported a $7.77 billion fourth-quarter loss due to failed loans and the costs of repaying $20 billion in government bailout money.
He also met with News Corp.'s Rupert Murdoch, with Kingdom Holding announcing that the two discussed expanding their alliance.
Details were not made public, but the move was widely read as an indication that media giant may be closer to a reported purchase of a stake in Alwaleed's Rotana Media Group, which operates satellites channels in the Middle East.