Kylie Minogue is one of EMI's artists

It added that it plans to write down a further �92m this year to take account of loss making investments.

The new write-down comes on top of the �38m that the company spent extricating itself from its contract with pop star Mariah Carey late last year.

The singer had signed with EMI in March 2001 in what was rumoured to be one of the most expensive recording deals ever.

The company said it plans to shed more underperforming artists this year.

Investors in London reacted with cautious approval, sending EMI's shares 9p higher to 355.75p in mid-afternoon trade on Wednesday.

The higher share price came despite news that EMI plans to cut its dividend - an annual payment to shareholders - by half, to just 8p per share.

Music woes

EMI, hit by a decline in music sales during the global economic slowdown last year, made a �2m loss for the March to September period last year, down from a �59m profit twelve months earlier.

The sales downturn came amid mounting investor concern over the company's ability to service its debts.

There has been speculation that EMI, the world's third biggest music group, might be forced to sell off assets including its stake in the HMV record shop chain and its legendary Abbey Road recording studios.

Last year, EMI tried to merge first with Warner Music and then with German media giant Bertelsmann, but both proposed tie-ups fell through.

EMI is due to announce results for the full 2001/02 financial year on 21 May.

The company said on Wednesday that it is on track to make a pre-tax profit of �150m, in line with its previous forecasts.