The group's operating profit fell to $6.8 million in the six months ended September 30.
The reported profit was down 25.4% from $4.3 million to $3.2 million.
Methven reported an improved net debt position by 10.8% from $19.5 million to $17.4 million.
Forsyth Barr broker Suzanne Kinnaird downgraded her 2012 full-year profit for Methven, in light of the muted market outlook.
Her valuation of the company fell from $1.95 a share to $1.90.
"While we continue to like the longer-term prospects for Methven based around the water and energy conservation features of its proprietary showerware, trading conditions in all markets remain challenging. Methven is in a sound financial position to trade through cyclical lows and we retain our hold recommendation," she said.
Group chief executive Rick Fala said challenging market conditions resulted in operating revenue falling 13.7% from $62.8 million to $54.2 million.
However, Mr Fala predicted "substantially improved" profit up 27% on the previous year, excluding the effect of Focus DIY entering into voluntary administration.
Since fully providing for the loss of Focus last year, Methven had successfully negotiated settlement with the administrator of 55 pence to the pound, he said.
"That cash settlement is in the bank - our bank. More importantly, we embarked on an aggressive UK turnaround strategy mid last year."
That led to the appointment of Steve Lee as the new Methven United Kingdom chief executive.
Methven had received encouraging feedback from international trade shows this year, including London, Frankfurt and Shanghai, Mr Fala said.
Results had been pleasing and indicated that brand recognition was improving and leading to distribution opportunities the company was pursuing.
Methven would continue investing in design and innovation as the platform to enable expansion across all international markets, he said.
"We are as committed as ever to design and innovation and after increasing investment 50% last year, we will continue to invest in expanding our portfolio of proprietary products," Mr Fala said.
Chairman Phil Lough said market conditions in Methven's core markets were not expected to improve in the near term.
"The second half of the year will see us consolidate the hard-won gains in turning around our UK business, achieving operational and product rationalisation savings across the group and improving shower market share in our core markets."
Last month, the manufacturer cut its annual earnings forecast range to between $6 million and $8 million from a $9 million estimate it gave shareholders in July, citing Australia's downturn in housing activity.
Yesterday, Mr Fala put the forecast back up to $9 million.
The company kept a steady stream of cash flow, and the board was able to announce an interim dividend of 4.5c per share, or $3 million. That was down from 5.5c per share, or $3.7 million, a year ago.
Methven's New Zealand business, which accounts for about 32% of the company's sales, reported a 28% fall in operating profit to $3.9 million with a soft residential housing market unlikely to improve in the next six months.
The Australian unit, which makes up about 46% of external sales, reported a 41% slump in operating profit to $A1.4 million in an increasingly competitive market.
The share price fell 5.5% to $1.04 in trading yesterday. It has shed 37% this year.
