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The company, who in 2007 took $1.34bn - a quarter of their global sales total - for contemporary art, have seen almost their entire first half results for 2008 skewed by shunting their big summer London contemporary sales forward to the first two days of July, meaning they will show up in the second half results instead.

The results for the first half of 2008 also include a $350m windfall from an oversubscribed offering to financial institutions. It will be used, in the words of chief executive Bill Ruprecht, to put Sotheby's in "an excellent position to be flexible and competitive" - as well as to fund the acquisition of their York Avenue premises and reduce debt.

Nevertheless, Sotheby's figures remain strong - the second highest ever released, pointed out Mr Ruprecht as he unveiled an aggregate auction total of $3bn for the first half of 2008.

The two London contemporary sales, which totalled just under $200m hammer, generated around $32m in commissions. Had this been included in the first half results, as usual, it would have meant a 3.7 per cent increase in revenues for the second quarter, instead of the 5.7 per cent loss filed.

By the same token, the first half dip in revenue by 7.3 per cent would have been cut to a mere one per cent.

Underlying trends do show an air of growing caution. Sotheby's had already lowered the cap on the guarantees they would issue at any one time from $500m to $350m and identified where savings could be made in the event of a downturn.

"Our conservative approach to risk, the significant improvement in our auction commission margins in the second quarter and our focus on costs have all contributed to healthy profitability," said Mr Ruprecht.

Lower operating costs and bonuses are the upside of lower sales activity, and increased commissions have also boosted the figures, though not to the level predicted.

A one-off benefit of $18.4m came from vendors failing to exercise their commission certificates, issued as compensation in the 2003 anti-trust case, before the May 2008 deadline.

Mr Ruprecht was also bolstered by the oversubscribed offer of senior unsecured convertible notes - redeemable in 2013 and 2015 and on which interest at an annual rate of just over three per cent is payable - that helped Sotheby's raise $350m to improve liquidity. As well as funding the acquisition of their York Avenue HQ, it means that they have already been able to pay off a $100m bond, due in February 2009.

Headlining the next quarter is Damien Hirst's landmark London sale, titled Beautiful Inside My Head Forever, which is expected to take around $130m over two days in mid-September.

Assuming its success, and following on from the July contemporary results, as well as the London Old Master sales, Sotheby's "expect a stronger third quarter than last year".

By Ivan Macquisten