RIYADH: Prince Alwaleed bin Talal, chairman of Kingdom Holding Company (KHC), yesterday announced the company’s financial results for the second quarter and the six months ended June 30, 2008.
The consolidated net income for the second quarter of 2008 of SR534.7 million increased by 21.8 percent when compared to the results for the second quarter of 2007. The consolidated net income for six months totaled SR838.5 million and resulted in an increase of 15.1 percent 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 SR2 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 (SR80 million), purchased additional shares in Saudi Research and Marketing Group (SR188 million). 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.
Talal Al-Maiman, executive director of development and domestic investment, is very encouraged by the prospects of the 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.
Prince Alwaleed was pleased with the second quarter results, which showed an increase of almost 22 percent 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.”