(Adds comments from company representatives)
MEXICO CITY, April 24 Mexican conglomerate Alfa
posted a 22 percent rise in its first-quarter net
profit on Monday, falling short of market expectations during a
period of high volatility for the peso currency at the start of
Donald Trump's administration.
After slumping to record lows after Trump's surprise U.S.
presidential election victory, the peso eventually gained 9
percent against the dollar during the first quarter. But it was
still weaker than in the January-March period of 2016.
Alfa's food unit Sigma and petrochemical arm Alpek both had
to pay more for materials purchased in dollars, while Sigma's
earnings suffered as it sells goods in pesos, the company said.
Nonetheless, the peso's first-quarter recovery also helped
underpin results, the company said in a statement.
"This year-on-year increase is mainly the result of lower
operating results but higher Comprehensive Financing Income
("CFI") due to higher foreign exchange gains stemming from the
appreciation of the peso during the quarter," Alfa said.
The Monterrey-based firm said it was closely watching the
exchange rate as it continues to look for the right time to list
Sigma on the local bourse, which would cap off a series of
public offerings of its firms that it started in 2012.
"The peso has had an important rebound," Alfa's Chief
Financial Officer Raul Leal told reporters on a phone call. But
"we want more stability in the country, we want more stability
on the bourse (to list Sigma)."
Alfa, which owns auto parts, petrochemicals and meat
processing companies, said its first-quarter results were
largely in line with expectations.
Nevertheless the company's net profit of 3.1 billion pesos
($166 million) was under the mean market forecast of 4.785
billion pesos, according to Thomson Reuters I/B/E/S.
The peso has been the world's best performing currencies
this year, recovering from an initially dire outlook after Trump
won office threatening to levy protectionist tariffs against
Mexico and seal it off behind a massive border wall.
Alfa plans to invest about $1.1 billion this year, down from
some $1.5 billion last year when it paid for work on two major
plants, the company said.
($1 = 18.7275 on March 31)
(Reporting by Mitra Taj, Noe Torres and Sheky Espejo; Editing
by Lisa Shumaker)