UPDATE 3-Profits tumble at Mexico's Alfa in Q2, hit by weak peso

Mon Jul 18, 2016 4:54pm EDT
 
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(Adds comments from CFO on possible bond issues, closing share price)

By Gabriela Lopez

MONTERREY, Mexico, July 18 (Reuters) - Mexican conglomerate Alfa posted a 70.9 percent drop in profits in the second quarter, dragged down by a depreciation in the peso currency, the company said on Monday.

Net profit at Monterrey-based Alfa was 817.3 million pesos ($44.8 million), sharply down from 2.81 billion pesos in the same quarter of last year, the company said in a statement.

Alvaro Fernandez, chief executive officer of Alfa, said the company's refrigerated food unit Sigma had suffered due to the peso's decline and that its Axtel telecoms business had also been affected by the currency's drop against the dollar.

All told, the peso's drop led to Alfa's total currency losses more than doubling from the same period in 2015 to $218 million, the company said.

"In general, our businesses and financial situation are still very solid and all the investment programs continue to support future growth," Fernandez said in the statement.

The company also lost $7 million in the market value of its stake in Canadian oil company Pacific Exploration & Production, which in April reached a deal to restructure its debt.

Total sales at the company rose by 13.2 percent in the second quarter to 73.1 billion pesos. However, in dollar terms, sales were down some 4 percent, to just over $4 billion.   Continued...