YGM Trading and Yangtzekiang Garment Manufacturing Co have both posted hefty drops in interim profits. YGM Trading's net profit for the six months to September 30 fell 21 per cent to $34.6 million. Yangtzekiang Garment saw net profits for the same period fall 39 per cent to $18.7 million. Sui Kau-chan, chairman of both companies, blamed continuing depression in the group's key European and US markets for dragging profits down. Yangtzekiang Garment and another associate company, the Rotterdam Group, have been particularly hit, and this has had an adverse knock-on effect on YGM Trading. YGM's half-year turnover actually rose 29 per cent to $479.7 million. Its garment retail and distribution business in Hong Kong, Taiwan and China has been expanding with growing profits. Its suit manufacturing plants in China have also been expanding, and steady operating profits have been forecast for the rest of the year. However, earnings per share fell 21 per cent to 24.5 cents a share. YGM's directors have proposed an unchanged interim dividend of six cents a share. First-half turnover for Yangtzekiang Garment fell just one per cent from $402 million to $398 million. However, in the same period, earnings per share plummeted 39 per cent to 13.3 cents a share and its directors have proposed a substantially reduced interim dividend of one cent per share. That compares with a half-year dividend of eight cents a share paid for the same period last year. The company said its manufacturing costs in both its Hong Kong and Macau factories had become increasingly less competitive and, as a result, the firm had shifted the bulk of its production to other, lower cost, countries in Asia. Mr Sui said he expected Yangtzekiang Garment profits for the second half of the year to be ''marginal''. ''As we forecast in last year's annual report the profit for the current year is likely to further deteriorate,'' he said.