The Swiss-based food and drinks group, Nestle S.A., has reported a net profit for the first half of the current fiscal year of SF2.78 billion, down 51% from SF5.65 billion in the first half of last year. Last year's figure was boosted by a CHF3.9 billion capital gain from the partial float of its eye-care unit, Alcon Inc.

However, the figure was in line with analysts' forecasts and, at a trading level, the company was pleased with its performance. Earnings before interest, taxes and amortisation were more or less stable at SF5.04 billion, with the group's operating margin rising from 11.9% to 12.2%.

"I'm very pleased with the figures because they were achieved in a very difficult environment," the company's CEO, Peter Brabeck, said. Nestle's first-half results were affected by the strong Swiss franc and by the SARS epidemic. Nestle said that underlying net profit rose by 4.9% and by 19.1% if the negative effects of currency exchange are stripped out, the company said.

Total turnover fell by 6.3% from SF44.21 billion to SF41.43 billion. Sales rose by just 3.5% in Asia where the company had been recording double-digit year-on-year growth.