KWV Limited's adjusted headline earnings for the first six months of its financial year dropped by a massive 30% from R70m to R50.5m.

However, the group said it was not discouraged by these interim results, which were in line with budgeted headline earnings for the period for the six months to 31 December 2003.

Almost two thirds of the group's turnover was derived from foreign currency and the group warned that if the strength of the Rand continued, the same negative trends would result for the year-end figures in June.

KWV's major launch into the South African market this month was also not expected have a "meaningful influence" on the final results for the year.

Total turnover of the group declined by 7.9% against the comparable period to 31 December 2002, while the exchange rate was responsible for a decline of about 8.5%.

Export volumes of packaged products grew by 2%, but the gross profit declined by R60.5m - 27% down on the same period in 2002.