UPDATE 2-Alsea expects European power costs to ease, says close to supply deal

(Updates with details on brands in paragraph 5, CFO quote and details on debt in paragraphs 7-10)

By Sarah Morland

MEXICO CITY, July 27 (Reuters) - The chief executive of Mexico-based restaurant chain operator Alsea on Thursday said the company is close to sealing a deal on electricity supplies for its stores in Europe, where high energy costs have bitten into company earnings.

"There are some big renewable projects in Europe," Armando Torrado said in a call with analysts, without specifying which power supplier Alsea, which operates chain stores such as Starbucks and Burger King, was in talks with.

Lower power costs should mean Alsea's European segment has stronger results this year, Torrado said, while prices for food staples such as coffee, cheese and wheat should drop.

Finance chief Rafael Contreras said he expects power costs to ease in the second half of this year, and could drop to 60 euros per megawatt in 2024 after exceeding 90 euros earlier in the year.

Alsea on Wednesday posted a second-quarter net profit more than double the figure a year earlier, boosted by a strong peso and increased consumption. Contreras said all brands had surpassed pre-pandemic levels, and some were now well ahead.

The executives also cited a profit boost from more demand for cold drinks from thirsty customers in parts of Latin America and southern Europe struck by a heatwave.

"We are seeing strong momentum in consumption," Contreras said, adding that he expects Alsea's brands to expand their market share.

While the appreciation of Mexico's so-called "super peso" helped lessen Alsea's Euro-denominated debt, which accounts for a third of the total, the firm also suffered lower European earnings when converted to pesos.

Alsea also passed its dollar-denominated bond to pesos, Contreras said, eliminating its dollar debt risk. Overall, the exchange rate shaved some 1.5 billion pesos off Alsea's debt, he said.

Alsea's total debt shrunk to 45 billion pesos by the end of June.

"With the foreign exchange we have right now, we can't do anything to have a better rate in terms of cost of debt," Contreras said on the call. (Reporting by Sarah Morland and Aida Pelaez-Fernandez; Editing by Valentine Hilaire, Barbara Lewis and Mark Porter)