By Souhail Karam
The losses were incurred after Kingdom Holding Co <4280.SE> liquidated "some international and local" assets in 2008 and made a $4 billion provision for impairment losses on its investment portfolio, board member Ahmad Halawani said.
Kingdom's earnings announcement, which came after the Saudi bourse's close, could add to investors' concern on the impact of the global crisis on local companies. The company is also the largest private shareholder on the Saudi bourse.
"The loss is shocking. We are talking about 50 percent of its capital," said Ibrahim al-Alwan, deputy chief executive at KSB Capital Group in Riyadh. Kingdom's paid up capital stands at $16.8 billion.
"Kingdom is like a fund, all it does it invest in different kinds of stocks, it has no other company dealings. This is going to affect the stock for sure," he said.
Before Kingdom announced its earnings, the Saudi bourse closed 2.41 percent down after its largest stock, Saudi Basic Industries Corp <2010.SE> (SABIC) announced a 95.5 percent fall in fourth-quarter profit that it attributed to the global economic crisis' impact on demand for its products. <LK271312>
SABIC earnings illustrated how the global crisis has pounded Arab Gulf firms, once thought protected from any downturn due to energy-export revenues and sovereign savings.
Prince Alwaleed hosted a news conference at his company's headquarters on Tuesday after the earnings were announced, but only a few representatives of Saudi media were invited.
Kingdom announced a fourth-quarter net loss of 30.97 billion Saudi riyals against ($8.26 billion) a net profit of 255.7 million riyals in the three months to December 31, 2007.
"The loss is mainly due to losses realized on our investments in capital markets," the company said in a statement posted on the stock exchange's website.
Board member Halawani told Dubai-based Al Arabiya television that the losses had been made after the company decided last year to sell some of its assets.
"The majority of these losses were realized on investment in shares traded internationally and locally," Halawani said.
He declined to say if the Citigroup <C.N> stake was part of the stakes it had shed, but said Kingdom's assets had fallen 44.4 percent to $13.3 billion.
"I don't want to give more details on where these investments were," he said when asked if Citigroup shares were part of assets sold.
The company is now in the process of "achieving balance in our investment portfolio," Halawani added, without elaborating.
Alwaleed was the world's 19th richest person with a $21 billion fortune according to Forbes' latest survey.
About 90 percent of Alwaleed's holdings in Saudi shares are in Kingdom, in which he owns a 94 percent stake.
Kingdom last week reduced to below 5 percent its stake in Samba Financial Group <1090.SE>, Saudi Arabia's second-largest listed bank, and it also owns 10 percent of Savola Group <2050.SE>, bourse data showed.
The conglomerate also owns 6.2 percent in Saudi industrial group Tasnee <2060.SE> and is the largest shareholder in Saudi Research and Marketing Group <4210.SE>, publisher of pan-Arab daily newspaper Asharq al-Awsat, with a 29.9 percent stake.
(Editing by Andrew Macdonald)