Australia's Queensland Cotton Holdings Ltd on Monday reported a sharp fall in first half net profit amid a slump in cotton production due to severe drought.

The company said first net income plunged 54 per cent to A$4.43 million from A$9.67m in the year-ago period with revenue down 36 per cent to A$284.2m from A$443.8m in 2001.

Its Australian operations generated a profit of A$7.65m versus A$11.6m last year while its US operations posted a A$3.2m loss compared with A$2m loss in the first six months of the previous fiscal year.

Officials said Queensland cotton production plummeted 33 per cent year-on-year due to a lack of rain and added the company is looking at a range of measures aimed at broadening its business operations.

Chief executive Richard Haire said: "We are looking at ways to improve our business efficiency and have already achieved excellent results in the Australian operations through centralising procurements, introduction of web-based communications and logistics improvements."