LOM Holdings Ltd profits have plummeted from over $6 million to just over $300,000 for the first six months of 2001.

The company, which floated earlier this year on the Bermuda Stock Exchange, and is principally owned by the Lines family said the falling profit was due to difficult market conditions.

A press release from Scott Lines, managing director of LOM said: "We are pleased to announce a modest level of profitability for the six months ended June 30, 2001, despite operating in extremely difficult market conditions."

Net earnings for the period were $337,192 compared to $6,090,635 for the same six months in 2000 and Net Revenue has nose-dived from $16,649,250 in the first six months in 2000 to $6,110,625 in the same period in 2001.

Basic earnings per share were $0.05 for the 2001 six month period, compared to $0.98 for the same period the year before.

Total operating expenses fell to $5.8 million from $10.6 million for the same six months the year before.

The release said about its revenues: "The weakness in global equity markets over the first six months of 2001 was reflected in a substantial decline in the company's primary revenue source, broking fees, which were down 66 percent over the same period last year.

"Net interest revenue fell by 36 percent due to continued interest rate cuts and lower margin borrowing by customers."

On the matter of costs, the release said: "LOM has proactively responded to the bear market by implementing a detailed group-wide review of our cost base. However, the group has continued to invest in areas identified as having longterm strategic importance and these costs have been expensed against current earnings."The company was upbeat about its future, stating: "LOM continues to invest heavily in technology despite the slowdown. These technology improvements will allow the group to maximise the efficiency and scalability of our securities execution and administration functions and result in an increase in our net return on sales.

"Thus when global equity markets recover we expect the group to substantially increase net earnings."

The company reported that as of 30 June 2001 the group's capital was $22m, of which 41 percent is in cash and reported that the company has no debt.

The report added: "The group is in a strong position to weather the current downturn in business and continue to expand business operations. The company's new subsidiary in Freeport, Bahamas is online, and we expect that office to begin to contribute to group revenue in the near future.

"Overall the outlook for our earnings this year remains very uncertain and this uncertainty has been compounded by the tragic events of the last week. We continue to expect a modest recovery in brokerage activity in the last quarter of the year. We believe that the world equity markets will experience a strong rebound in 2002 and this will have a very positive impact on the company's revenue and net profits."

Earning per share on a fully diluted basis was $0.05 for the 2001 period and $0.91 for the 2000 period and dividends per share were $0.06 and $0.05 respectively.