UPDATE 1-Mondadori CEO says Q1 ad sales up more than 5 pct

(Adds CEO comments, statement)

MILAN, April 22 (Reuters) - Advertising revenue at Italian publisher Mondadori (MOED.MI: Quote, Profile, Research) rose more than 5 percent in the first quarter, although the year looks "challenging", Chief Executive Maurizio Costa said on Tuesday.

With the Italian economy expected to grow just 0.3 percent this year and the next by the International Monetary Fund, advertising revenue appears under pressure. Italian media group L'Espresso (ESPI.MI: Quote, Profile, Research) last week forecast a fall in 2008 profit due to the weakening economy.

"It is a difficult and challenging year", Costa told journalists after a shareholders' meeting on Mondadori's 2007 results.

However, "ad sales in the first quarter were above 5 percent, with a very good performance from radio -- which saw significant double-digit growth -- and our publications," he added.

Mondadori, best known outside Italy for its Grazia magazine, is controlled by prime minister-elect Silvio Berlusconi.

The group reaps about 18 percent of its revenue from advertising. It forecast in March flat operating profits for 2008 net of one-offs and development costs.

"For our traditional businesses, such as books and magazines, the first quarter did not differ markedly from last year," Costa said.

As expected, sales of add-on products sold with magazines fell, he said.