Profits before taxation were down from £8.36million to £1.27million while bank debt increased from £0.97million to £3.13million.
Chairman John Reid blamed the downturn on failure to qualify for the Champions League in addition to "more difficult trading conditions".
On a statement on the club's website, Reid said: "A year ago I reported on a very positive set of interim results.
"This reflected good trading conditions, three recent Scottish Premier League Championships and participation in the Group Stage of the UEFA Champions League as Scotland's sole representative.
"I said then that football and commercial success went hand in hand. This year's report confirms that assertion.
"It certainly reflects different, more difficult trading conditions, and it is plain that like other commercial concerns we are affected by the recession.
"But it also reflects disappointing performance on the park; we did not qualify for the UCL Group Stage this season as we had hoped, instead participating in the Europa League.
"The difference that this and the economic climate have made to our business is borne out in our financial results for the six months to 31 December 2009."
Reid continued: "Turnover of £36.11million is well down (22.8%) on £46.8million at the same time last year; but while our revenues have reduced our financial performance remains highly creditable given all the circumstances.
"Despite the absence of Champions League participation, over 50,000 season tickets have been sold and our merchandising business is holding up well, with this year's away kit the best selling for many years.
"Our sponsor programme also remains one of the most successful in British football.
"Non-exceptional operating expenses have decreased by £2.71million to £31.39million, largely through labour cost savings, and we remain in profit, generating a profit from trading before asset transactions and exceptional items of £4.71million against last year's £12.68million and a profit before tax of £1.27million against £8.36million at the same time last year.
"Maintaining a sustainable economic and business model has been one of our key objectives, and for good reason.
"It has always had only one ultimate purpose - the success of Celtic Football Club.
"It has provided financial stability when needed; it has delivered the continuing support of our kit manufacturer, Nike, with whom a five-year contract extension starts in July this year, and in an extraordinarily difficult sponsorship market, it has brought the commitment of Tennent's as our new shirt sponsor.
"This approach, together with the backing of our fans, shareholders and business partners has enabled us to continue to invest in our business, even at this time.
"It is a great credit to all those concerned, and on behalf of the club, I express our thanks."
Reid acknowledged the 10-point gap which Rangers have over Celtic at the top of the table but pointed out that the club's careful financial housekeeping has allowed funds to be made available for manager Tony Mowbray.
He said: "It is our financial stability that now gives us the means to plan for the years ahead and to rebuild a successful and winning team.
"As seen in these interim results it has already allowed us to have an eye to the future, as well as to the task of trying to win the Scottish Premier League title back this season.
"During last summer it enabled us to increase our investment in football personnel, committing just under £8million against just over £7million at the same time the year before.
"That has contributed to net bank debt at 31 December 2009 increasing from £0.97million to £3.13million, a level that is manageable and has therefore permitted further player trading in the January registration window.
"Perhaps above all, it is that careful management of our resources that has enabled us to progress the transition under our new manager Tony Mowbray and his team.
"Rebuilding is never easy. But our summer transfer activity and the significant further strengthening of the squad in January honour the pledge we made to support our manager and improve the team.
"Braafheid, Fortune, Hooiveld, Kamara, Robbie Keane, Ki Sung Yueng, NGuemo, Rasmussen, Rogne, Thompson, Zaluska and Zheng Zhi, together with several younger promising players, have joined us. Others have left - we thank them for their service to the club, and wish them well.
"We have an enormous task ahead in recovering the current league points deficit and cannot pretend otherwise, but we look forward to the SPL title challenge and a Scottish Cup run, with determination, commitment and, most importantly of all, your support."
Scottish Premier Winner 2009/10 Win Outright: Celtic 7/2