Lianhua Supermarket Holdings reported a slight drop in operating profit for the first half as the company booked a one-off gain on securities last year.

Lianhua, China's largest supermarket operator saw operating profit close at JPY220.6m (US$2.02m) from JPY222.8m from the same period last year.

The company posted an increase in net profit of 61.8% for the first half as store sales and gross profit margin increased, offsetting rising operational costs.

For the period to 30 June 2008, net profit rose to JPY227m from JPY140m from the same period in 2007.

Wang Zhigang, chairman of Lianhua Supermarket, said: "In the first half of 2008, the group actively promoted the "Strong Outlet" strategy and outlets transformation while strived to improve our operation and foster the building of supporting system at the meantime.

"These measures not only mitigate the pressure of operating cost increase, what's more, have helped the group achieving stable sales growth and substantial growth in the operating results in core business. We can expect the group's future development will be further improved with the betterment of our earning structure."