July 15, 2013 / 8:47 PM / 4 years ago

UPDATE 2-Mexico's Alfa second-quarter profit plummets

MEXICO CITY, July 15 (Reuters) - Mexican industrial conglomerate Alfa said on Monday its second-quarter profit fell, hurt by a weaker Mexican peso and one-off charges related to a factory sale at its petrochemical unit, Alpek .

The company said second-quarter profit slipped to 49.307 million pesos ($3.8 million) from 1.512 billion pesos in the year-earlier quarter, largely because of 2.353 billion pesos in charges related to its planned closure of a U.S-based factory.

Alpek said last month it would end operations at a plant in Cape Fear, North Carolina, that makes plastics for packaging as well as polyester.

The company hopes to generate $30 million in annual savings by closing the plant and transferring production to more efficient sites, Alfa’s statement said.

Alfa does not expect to close any more plants, Chief Financial Officer Ramon Leal told journalists on a call.

The company’s consolidated revenue in the local currency fell 1.3 percent to 50.877 billion pesos, although revenue in U.S. dollars rose 6 percent to $4.07 billion, the company said.

The Monterrey-based company said in dollar terms revenue at petrochemical unit Alpek fell, hurt by weaker margins on products such as polyester, as well as power outages at plants in Mexico.

Alfa’s auto parts and telecommunications businesses reported higher U.S. dollar revenue in the second quarter, but it was not enough to offset weakness at Alpek.

The company’s shares closed up 2.48 percent at 32.25 pesos before the results.

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