(Corrects sixth paragraph to show Leal spoke on a conference
call with reporters not analysts)
MEXICO CITY Oct 17 Mexican conglomerate Alfa on
Monday reported a more than 90 percent fall in third-quarter net
profit, compared to the same period last year, hurt by higher
administrative and financial costs.
Monterrey-based Alfa, which makes car parts and
sells processed foods, reported a profit of 234.5 million pesos
Revenue rose 11.8 percent to 75.3 billion pesos, as the weak
peso raised the value of its income in U.S. dollars.
The peso has been hit by fears that Donald Trump could
clinch the U.S. presidency. Trump has vowed he would build a
wall on the border with Mexico and renegotiate or scrap the
North American Free Trade Agreement if he is elected.
Ramon Leal Chapa, Alfa's chief financial officer, said the
company continued to suffer from low economic growth and
volatility in oil prices.
"The good news is that by the end of the quarter, there was
more stability than in the beginning," Leal said on a conference
call with reporters.
The company's administrative costs rose by more than one
third from the year-earlier quarter to 5.2 billion pesos.
Sigma, its frozen foods division, saw consolidated earnings
before interest, tax, depreciation and amortization (EBITDA)
fall some 20 percent from the year-earlier quarter, according to
a company press release.
Leal said the decline was misleading because the division
had collected insurance coverage in the third quarter of 2015
due to damages and losses associated with a fire at its CFG
plant in Burgos, Spain.
"Excluding these two factors, i.e. the insurance collection
and the effects of the exchange rate, the (cash) flow would have
increased 8 percent, which is positive in an environment of low
economic growth," he said.
The company said there was no date for a possible initial
public offering of the Sigma subsidiary, a plan that the Mexican
conglomerate had floated in 2014 to lower its debt burden.
Alfa revised lower its 2016 sales outlook in July, after it
posted a sharp drop in profits in the second quarter.
($1 = 19.3820 at end-September)
(Reporting by Mexico City Newsroom; Editing by Bernard Orr)