Dunloe Ewart has been forced to write off €15.4 million (£12 million) against the value of its Northern Irish property portfolio, pushing the troubled property company into the red.

The group has reported pre-tax losses of €12.2 million for the six months to June compared to profits of €3.14 million in the same period last year.

Mr Noel Smyth, company chairman, blamed the political situation and the failure of the British government to back his plans for the fall in the value of its Belfast land holdings.

Dunloe Ewart wants to build a mixture of commercial premises, apartments and retail outlets on the Sirocco site which fronts on the Lagan but has yet to secure planning permission. The company has now decided to make a €13.2 million provision against the carrying value of the site, which it bought for €38.2 million in late 1999.

Turnover during the period rose from €22.2 million to €36.78 million.

The increase was wiped out by a rise in costs of sales from €7.7 million to €37.3 million as a result of provisions against the value of Belfast sites and other liabilities.

Dunloe Ewart has had to provide an additional €5.1 million against penalties incurred from the early repayment of bank debt following the sale of the majority of the company's development portfolio during the year. Properties worth €156 million were sold and group debt reduced from €243 million to €113 million. Gearing fell from 137 per cent to 67 per cent as a consequence.

Losses per share were 3.3 cents compared to earnings of 0.6 cents last time.

The company said it would focus on the development of key properties and the disposal of non-core assets. The sale of much of its investment portfolio has reduced rental income from €13.4 to €10.6 million. In consequence the company said it would seek to pre-let and pre-fund development properties before construction.