The groups stable of stars including the Spice Girls, the Beatles, Robbie Williams, the Beastie Boys and Janet Jackson have been unable to stem the decline in earnings.

Sales fell by 30% in Brazil, and 15% in Asia due to the economic crisis.

Record breaking

Chairman Sir Colin Southgate admitted that a weaker list of music releases and the deterioration in demand for records in many of its markets had hit profits.

A new album from Robbie Williams may help EMI to get back on song

However EMI's deputy chairman Simon Duffy said the group is in negotiation with another music company over a distribution deal for a major Asia-Pacific market.

EMI's underlying pre-tax profits fell almost 11% to to £68.6m ($113m) and sales slipped 3% in the six months to 30 September.

Turnover was down 3% from £1.03bn last time to £994m for the half-year.

The group also said conditions in the worldwide music market could remain difficult.

It said the outlook for the global economy remains uncertain, "which makes it difficult to forecast music markets with confidence."

The company - the third largest record company in the world - also said there had also been a significant slow down in sales in Europe.

It said it would continue to cut costs in an effort to protect margins.

Profit margins fell from 11% to 9%.

Takeover speculation

German media group Bertelsmann and Rupert Murdoch's News Corporation have both ruled out an imminent deal with EMI.

Mr Southgate did not comment further on the group's talks with potential takeover suitors.

Earlier this year the group was spurned by Canadian drinks and entertainment group Seagram, which chose to buy Dutch rival Polygram.

EMI has also frozen its dividend. Shareholders will pick up an interim dividend of 4.25p - the same as last year.