The regional economic slump has forced hotels and property group Shangri-La Asia to report a 49 per cent slide in net profit to $240.72 million for the six months to June 30. The company also said yesterday it was freezing development of three hotel projects in the mainland and was negotiating to stop work on a fourth. Turnover fell to $1.43 billion from $1.64 billion in the first half last year, while earnings per share dived to 13.38 cents from 29.79 cents. Shareholders will be paid an interim dividend of eight cents per share, compared with last year's 15 cents. Operating profit contributions from the group's Hong Kong hotels, the Kowloon Shangri-La and the Island Shangri-La, were $100.5 million, down 61.12 per cent on the same period last year and a 41 per cent fall from the second half of last year. 'The industry had its best possible performance in the first half of 1997 so, to an extent, the year-on-year comparison may not be so appropriate,' chief financial officer Madhu Rao said. Combined food and beverage revenue in Hong Kong fell 22 per cent to $236 million, while gross revenue slid 31 per cent to $530 million. Hong Kong occupancies dropped to 61 per cent for the six months under review from 77 per cent during the same period last year, while average room rates fell to $1,657 per night from $2,085. The firm said it expected the Hong Kong hotels' unfavourable performance to continue for the rest of the year. 'If you look at the numbers, and the prospects, in many respects the key to the type of recovery we can all expect in late-1999 and 2000 is Hong Kong,' said Thaddeus Beczak, deputy chairman of the company. Operating profits from mainland hotels rose 55.9 per cent to $84.5 million. Mr Rao said mainland projects to be frozen were in Tianjin, Shenyang and Fuzhou, while the firm was negotiating with authorities to do the same at its Jingan Nanli hotel project in Shanghai. Money already invested in the deferred projects was 'not more than' US$105 million, Mr Rao said. Shangri-La Asia, which operates hotels under the Shangri-La, Rasa and Traders brand names, is controlled by Robert Kuok, who is also the largest shareholder in South China Morning Post (Holdings).