(Adds details, share price, paragraphs 4-6, 9-14; adds byline)
By Chris Aspin
MEXICO CITY, July 28 (Reuters) - Mexican industrial conglomerate Alfa said on Monday it posted an 887-million peso ($84.8 million) second-quarter net profit, reversing last year's losses with currency gains and higher sales from firmer pricing.
Alfa , one of Mexico's biggest companies with units that make steel, food, petrochemicals and auto parts, said the 3 percent appreciation of the peso against the dollar kicked in foreign exchange gains for the bottom line.
Alfa's second-quarter revenues rose to 14.521 billion pesos, up 9 percent from the April-June period a year earlier. "Revenues are higher due to better pricing conditions in some of the businesses, like in petrochemicals," Alfa said.
But weak steel exports took the shine off the rosy top and bottom lines and sent Alfa's shares lower in a local market that was also in profit-taking mode.
"The company continues to have a big problem in the global steel markets and it is going to take a bit of time to pick up," said Martin Gonzalez, analyst with the Invex brokerage.
Shares of Alfa closed down 2.92 percent at 21.27 pesos. The stock is up close to 27 percent so far this year while the Mexican bourse's leading index has gained about 20 percent.
Second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 2.089 billion pesos, a 5 percent decline from a year ago.
Alfa's EBITDA was slightly lower than expected as a previous Reuters survey had forecast EBITDA of 2.206 billion pesos. The survey showed no consensus on net profit with estimates ranging from 164 million pesos to 1.221 billion pesos.
Monterrey-based Alfa said its operating results were lower because of declines in sales volumes.
"Higher average prices contributed to better reported revenues but did not fully translate into operating income because in some cases price increases were in response to higher costs. Also the lower sales volumes in the quarter did not allow the more efficient allocation of fixed costs," Alfa said.
Alfa's Sigma food division, which produces an array of products from sausages to yoghurts, was the stellar unit, reporting a 10 percent increase in revenues and a 16 percent jump in EBITDA on volume growth and savings in operating expenses.
Export markets for steel products for Alfa's Hylsamex division were soft in the quarter, especially as China reduced purchases to lower inventory levels after building up stocks in previous quarters.
"Export activities became more difficult and less profitable," Alfa said. "As a result the company was not able to maintain the high export levels of previous quarters," the company said.
Alfa did note that domestic steel demand remained strong. (Additional reporting by Gabriela Lopez in Monterrey)