The earnings slide comes at a sensitive time for the 167-year-old business. It has recently completed its latest management shake-up while controlling shareholder Margarita Louis-Dreyfus needs almost $2 billion to support debt-laden Brazilian sugar unit Biosev and buy out family minorities.

Monday's interim results statement provided clues to how Russian-born Louis-Dreyfus is gathering funds. It showed that the operating company lent $1 billion to its holding company, mostly related to Biosev, through a loan due to mature in 2023. It also reported a $411 million dividend awarded to shareholders for 2016 and 2017 results.

The commodities group said that a $65 million loss linked to hedging of soybean crushing margins had contributed to the decline in group net profit to $100 million from $160 million.

However, the company said the hedging would ensure "a high return from our crushing activities for the whole of 2018" and, echoing comments made by new Chief Executive Ian McIntosh late last month, that it was expecting a decent year.

Commodities firms have been grappling with fluctuations in the soybean market amid a trade spat between major exporter the United States and top importer China.

The expectation of a subsequent payback for Louis Dreyfus from its soy crush hedging was reasonable, said an industry source familiar with the business.

McIntosh, who succeeded Gonzalo Ramirez Martiarena two weeks ago, has said that Louis Dreyfus would benefit from volatility because of its strong presence in the oilseed sector in South America and China, and that it had reinforced its processing clout through the takeover of a factory in northern China.

However, the dividend to shareholders and the loan to the holding company raised some eyebrows in the market.

Louis Dreyfus was going "from bad to worrisome", commodities consultant Jean-Francois Lambert said, adding that most of the group's businesses had struggled in the first half.

Louis Dreyfus has restructured its operations in response to several years of weak agricultural markets, selling its metal trading unit and part of its fertiliser distribution network.

However, the divestment of the profitable metal trading business contributed to a steep decline in net income from continuing operations to $67 million from $134 million.

"I'm not sure there's much more leverage available to the main shareholder," the industry source said.

(Reporting by Gus Trompiz, additonal reporting by Maha El Dahan in Dubai; Editing by Sudip Kar-Gupta, Louise Heavens and David Goodman)

By Gus Trompiz