Tesco's half year underlying pre-tax profit fell 7.4 per cent to 1.4bn pounds as the UK supermarket chain's trading was hurt by challenging market conditions.
Trading profit for the six months to August 24th 2013 declined 7.6% year-on-year to £1.6bn, weighed down by weak performance in Europe where trading profit dropped 67.8% to £55m.
Sales across the group were on the other hand up 2% to £35bn, boosted by growth in online grocery.
Underlying diluted earnings per share, dropped 7.92% to 14.88p.
The grocer has been undergoing a major restructuring, which was announced in April, in an effort to boost sales and claw back market share.
As part of the overhaul, the supermarket has announced a deal with China Resources Enterprise to combine their Chinese retail operations to form a multi-formal retailer in the world's second largest economy.
Tesco will combine its 134 Chinese stores and Chinese shopping mall business (with the China Resources Vanguard's 2,986 stores).
"Through this deal we have a strong platform in one of the world's most exciting markets and it will move us more quickly to profitability in China," said Chief Executive Officer, Philip Clarke.
Tesco's Chinese business trading losses came to £72m for the year to end of February 2013 and hopes the new deal will bring growth.
In the half-year statement, the group also said customers have responded well to changes made under the 'Build a Better Tesco in the UK' scheme including measures to improve the quality of fresh meat. The move comes after horse meat was found in some of the company's beef products.
"This process of continuous improvement, underpinned by the other elements of the UK plan, has led to an improved like-for-like sales growth of 1% in our food business in the second quarter [...]," Tesco said.
Electronics and maintenance products supplier Electrocomponents posted half year sales growth of one per cent after a solid performance from Continental Europe and North America outweighed weakness in the UK.
In an update for the six months ending September 30th, while underlying sales grew just 1%, stronger sales growth of around 4% was recorded in September.
International grew by 3% and the UK declined by 3%. Within International, both Continental Europe and North America grew by 3% and Asia Pacific was flat, the group explained.
eCommerce sales, which makes up around 57% of group sales, grew 6% during the period.
Chief Executive Ian Mason said: "In the first half group underlying sales growth has remained similar to the second half of last year, at around 1%. We are investing in our strategic priorities to enable us to grow market share and improve our financial performance over the medium term."
Electrocomponents said there have been no significant changes to its financial position during the period.