Kingdom’s Fourth-Quarter Net Drops 20% on Middle East Unrest
Kingdom Holding Co. (KINGDOM), a diversified investment company controlled by Saudi billionaire Prince Alwaleed bin Talal, said fourth-quarter profit declined 20 percent on “a decrease in performance” from operations in the Middle East.
Net income fell to 187.8 million riyals ($50.1 million) from 234.6 million riyals a year earlier, the company said in a statement to the Saudi bourse today. Operating income decreased 36.4 percent to 168.4 million riyals.
Non-oil producing Middle Eastern economies suffered last year as popular revolts eroded income from tourism, manufacturing and construction. Kingdom Hotel Investments, a unit of Kingdom Holding, operates two Movenpick Hotels & Resorts AG hotels in Egypt and Four Seasons hotels in Beirut and Damascus, according to the company’s website.
Egypt’s gross domestic product grew 1.8 percent in the fiscal year ending June 30, its weakest performance in at least 10 years. In Syria, where the United Nations says more than 5,000 people have died from the political unrest, the International Monetary Fund forecasts a contraction of 2 percent last year while London-based research company Business Monitor International says the economy contracted 9.6 percent in 2011.
The reason for the change in net income for the fourth quarter is due to “a decrease in performance from associates, and hotel operations due to recent events in the Middle East,” Kingdom Holding said in its statement.
The shares were unchanged at 10.05 riyals at 11:04 a.m. in Riyadh, valuing the company at 37.2 billion riyals. The stock gained 8 percent last year compared with a 3 percent drop in the benchmark Saudi Tadawul All Share Index. (SASEIDX)
To contact the editor responsible for this story: Shaji Mathew at firstname.lastname@example.org