MING Pao Enterprise Corp has reported a 40 per cent drop in profit to $53.96 million for the six months to September 30, citing keen competition and soaring newsprint costs as reasons. The company said yesterday it had been unable to get back $176.2 million in unsecured short-term loans. It said it would closely monitor the situation to see what action could be taken. The company's annual report for last year was qualified by auditors over three loans and a deposit. The principal amounts of two loans and the deposit have been settled, while a loan to a mainland independent party has been partly repaid. The company has recovered $104.52 million. Of the $176.2 million in loans to be recovered, the company said $170.31 million of a $185.79 million loan was owed by the mainland party. A $5.9 million loan was owed by another unrelated party from whom the company had acquired First Collection, which has a stake of about 30 per cent in a golf club being developed in China. It said interest income from the deposit and the mainland loan amounted to $13.96 million, which remained unsettled. An interim dividend of three cents a share will be paid, against nine cents for the same period last year. Ming Pao said the launch of Apple Daily in June had fuelled competition in the Chinese-language newspaper market for readers and advertisers. Although its paper Ming Pao Daily News had a good reputation and enjoyed a broad reader base, the impact from the new newspaper had been felt. The price war started this month among the Chinese newspapers was taking its toll and the company said it was premature to assess its financial impact. Turnover for the first half rose 5 per cent to $672.56 million. Earnings per share were 15.1 cents, against 25.1 cents previously. Ming Pao said the surging costs of newsprint exerted pressure on the group. Director Paul Hui Hau-tung said the company's Canadian operation was progressing satisfactorily and was expected to make contributions in the coming year. The company's international Chinese weekly, Yazhou Zhoukan, would open a branch in Taiwan. Since the cash offer of new chairman Tiong Hiew King to buy all the issued shares of the company, less than 25 per cent of Ming Pao shares were in public hands. Trading in the shares has been suspended since December 12 and the firm is working on a resumption of trading.