(Recasts with Alfa divesting assets)
MEXICO CITY Feb 14 Mexican conglomerate Alfa
said on Tuesday it will sell its energy projects in
the Eagle Ford shale in Texas, as well as its energy assets in
Peru, while also stalling all energy investments due to
lingering low oil prices.
Alfa's Chief Financial Officer Ramon Leal said at a press
conference the company was also looking at selling certain oil
service contracts in Mexico.
"We're focusing our resources in our core businesses and
putting a permanent pause on our energy investments," Leal said,
adding that he did not see oil prices rising any time soon.
Last year, Alfa said its energy services unit Newpek
suspended some exploration and drilling projects in the United
States in the face of the persistent fall in petroleum prices.
Alfa holds mineral rights in southeast Texas - in the Eagle
Ford, Edwards and Wilcox fields - as well as in Oklahoma, Kansas
and Colorado. Newpek, which reports on Wednesday, also works in
mature oil fields in the eastern Mexican state of Veracruz.
Earlier on Tuesday, Alfa reported a loss of 889.7 million
pesos ($43 million) in the fourth quarter of 2016, hurt by a
weak peso and lower operating results.
The company, which operates petrochemical, car parts and
refrigerated food businesses, reported a profit of 162 million
pesos in the fourth quarter of 2015.
Alfa posted revenue of 76.7 billion pesos for the quarter,
an increase of 18 percent from the same period a year prior.
But the performance of its Axtel telecoms business was
negatively impacted by the weakness of the peso against
the dollar, in addition to cuts in government spending that
resulted in fewer projects.
The peso has been hit by repeated threats by U.S. President
Donald Trump to scrap the North American Free Trade Agreement
(NAFTA), raising the risk of a major economic shock for Mexico.
Even so, Alfa said car parts unit Nemak's
consolidated earnings before interest, tax, depreciation and
amortization (EBITDA) performed well during the quarter, and
reached an annual record in 2016, due to solid auto demand in
North America and Europe.
Alfa also said a strong dollar benefited Nemak's sales in
the fourth quarter.
Shares in Alfa closed down 0.67 percent at 26.61 pesos per
share before the company reported.
($1 = 20.64 pesos on Dec. 30)
(Reporting by Natalie Schachar and Noe Torres; Editing by Lisa