Supermarket giant Tesco posted falling first-half profits on Wednesday, with Britain\'s biggest retailer hit by a poor performance at its international division, particularly in South Korea but also in Europe. Net profits slid 6.8 percent to £1.283 billion ($2.067 billion, 1.6 billion euros) in the 26 weeks to August 25, compared with the same period of the company\'s previous fiscal year, Tesco said in a results statement. Market expectations had been for profit after tax of £1.375 billion, according to analysts polled by Dow Jones Newswires. \"The external environment continues to present challenges all over the world,\" said Tesco chief executive Philip Clarke, who in April launched a £1.0-billion turnaround plan at the group to try and transform its ailing domestic activities. \"Whilst our businesses in Asia and Europe have continued to do a great job for customers, our financial performance there reflects the tough economic backdrop and particularly the regulatory changes in South Korea,\" he added Wednesday. Tesco was hit hard in the first half also by rising tax costs in Hungary and the Czech Republic. Pre-tax profits dived 12 percent to £1.7 billion in the first half even as overall sales rose 1.4 percent to £36 billion, added Tesco, which is the world\'s third-largest retailer after US-based Wal-Mart and France\'s Carrefour in second. Tesco has struggled in the face of Britain\'s recession which began late last year, with many cash-strapped customers flocking to rival supermarkets such as Asda, Sainsbury\'s and budget chains Aldi and Lidl in search of cheaper products. Clarke, who took on personal responsibility for Tesco\'s domestic business in January, admitted that there was still work to do. \"I wouldn\'t say we\'ve turned a corner (at British operations) but we\'re edging in the right way,\" he said. Tesco\'s share price slid in reaction to the earnings update to stand down 1.69 percent at 331 pence in afternoon deals on London\'s FTSE 100 index of leading companies, which was up 0.13 percent. Elsewhere on Wednesday, Sainsbury announced that its like-for-like sales had risen by 1.9 percent in the second quarter, helped by its sponsorship of the London 2012 Paralympic Games. Investors welcomed the news, sending Sainsbury\'s shares 0.78 percent higher to stand at 349.50 pence. \"Sainsbury\'s managed to buck the poor performance Tesco seems to be showing this year,\" noted Spreadex trader Shavaz Dhalla.