trading company and a symbol of its colonial past, said first-half profits tumbled 66 percent and warned there is no relief in sight.

The company, with interests ranging from pastry making to construction to stock broking, said profits, excluding exceptional items, fell to US$103 million. Analysts had expected up to a 67 percent drop net profit of $92 million.

"The severity of the current economic downturn across Asia presents a challenging environment for all our businesses,'' said Henry Keswick, Jardine Matheson's chairman. "And the second half of 1998 is not expected to show any improvement.'' Jardine Matheson reported sales of US$5.7 billion, a decrease of one percent.

The company made provisions for a one- time loss of US$2.7 million.

Jardine Matheson is a Bermuda-registered holding company and does business through a mixture of publicly traded and privately held associates and units.

All of the operating units of Jardine Matheson, which focus on trade, marketing and real estate, are vulnerable to deepening recessions across much of Asia, analysts said.

Jadine Fleming Group, a Hong Kong-based investment bank jointly owned by Jardine Matheson and the Robert Fleming Group, was hurt by slow trading in many Asian financial markets. Jardine Fleming said it broke even in the first half, earning US$13 million before tax. It didn't provide an after-tax figure.

Jardine Pacific, which operates through a series of small trading companies, said its first half profits were US$25 million, 40 percent less than this year. Its marketing and distribution businesses were particularly hard hit has consumer spending in Hong Kong slumped.

Hongkong Land Holdings Ltd., Jardine's property arm, reported a first-half profit of US$169 million on Monday, an 18 percent decline. The fall was mainly due to a US$30 million provision against Southeast Asian road and property assets. Rents fell in downtown Hong Kong, eating into the company's rental revenue.

Mandarin Oriental said on Wednesday its net profit was US$10 million during the first half, compared to US$34 million during the same period last year, as declining tourism and falling hotel room rates in Asia cut into margins.

Dairy Farm International Holdings Ltd., which runs supermarkets and drugstores, reported a profit of US$87 million, up from US$40 million a year earlier. Excluding one-time gains and income from businesses since sold, profit rose 6 percent to US$46 million. The company has installed new management and sold poorly performing European businesses.

Jardine International Motor Holdings Ltd., 75 percent held by Jardine Matheson, reported last week profit fell by 37 percent in the first half to US$28 million. Cycle & Carriage Ltd., which sells car in Singapore and Malaysia, went into the red during its first half, losing S$21 million (US$12.2 million). Car sales are down across Asia.

Keswick said consumer confidence is now at a low ebb in most of company's markets, putting pressure on sales and margins. While governments are making structural changes needed for a recovery, Jardines expects its markets to remain depressed for some time, and the company is concentrating on cutting costs and ensuring financing.

It could be a long wait. In Hong Kong, the centre of Jardine Matheson's operations and profits, economists say the economy won't grow again until some time in 2000.

Consumer sales have fallen since November, and consumer prices are falling month-on-month, and by next spring may be falling year-on-year -- not good news for a company that relies on marketing, sales and rents for its core profits.

"Apart from a strong balance sheet, the Jardine Group couldn't be in a worse position to weather this recession,'' said K.Y. Ng, an analyst with Santander Investment Securities Ltd.