Toray Industries Inc, Japan's largest manufacturer of synthetic fibres, on Tuesday reported a 54 per cent drop in first half operating profit in its fibre and textile division to Y4.0 billion. The firm blamed weak demand for clothing textiles along with falling prices.

Overall, the group posted a 2.6 per cent increase in first half net profit to Y1.28 billion - mainly due to a decline in interest payments and foreign exchange profits from subsidiaries in Indonesia and South Korea.

For the six months to 30 September group sales fell 3.8 per cent to Y498.5 billion. Operating profits were down 20.7 per cent to Y12.6 billion.

The earnings outlook for the full year to 31 March 2003 is unchanged at Y6.0 billion on group sales of Y1.040 trillion. Operating profit is expected to be Y30 billion.