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UPDATE 2-RCS, Mondadori H1 hit by ad spend fall, outlook grim
July 29, 2009 / 3:00 PM / in 8 years

UPDATE 2-RCS, Mondadori H1 hit by ad spend fall, outlook grim

* RCS H1 swings to net loss of 65.1 million euros

* Mondadori H1 net profit 7 million euros, down 80 percent

* Mondadori sees restructuring in coming months

* RCS shares up 1.2 pct, Mondadori up 3.7 pct (Recasts, adds Mondadori results, updates shares)

By Danilo Masoni

MILAN, July 29 (Reuters) - Italian newspaper publisher RCS MediaGroup and book and magazine publisher Arnoldo Mondadori both reported sharply weaker first-half results on Wednesday as advertising spending fell, and gave downbeat outlooks.

RCS (RCSM.MI), which publishes Italy’s biggest selling newspaper, Corriere della Sera, reported a first-half loss, while Mondadori had an 80 percent drop in profits.

Both predicted a grim 2009. RCS forecast “significantly negative” results this year due to continued uncertainty, while Mondadori (MOED.MI) said it still viewed this year as “difficult and challenging”.

Non-professional publishers have been hit hard by the downturn because of sharp declines in advertising as well as in circulation of their products, as corporations slash spending and consumers turn to the Internet for news.

RCS said its net loss in the first half was 65.1 million euros ($92 million), better than the average forecast of a 71 million euro loss, according to a Reuters poll of three analysts. Its revenues fell nearly 19 percent.

    RCS’s result was also weighed on by restructuring costs. In May the heavily indebted company approved a 200 million euro cost cutting plan, averting a capital increase.

    Mondadori, which publishes women’s magazine Grazia and news weekly Panorama, posted a first-half net profit of 7.3 million euros, also topping expectations for a profit of 1 million euros, according to a Reuters poll of four analysts. Its revenues fell 21.4 percent.

    It gave no clear indication about much-awaited cost cuts but said it expected a “strong” restructuring in the coming months. The company is owned by the family of Prime Minister Silvio Berlusconi.

    RCS and Mondadori results compare with stronger results at Wolters Kluwer (WLSNc.AS). The Dutch Publisher posted higher revenue and profit earlier on Wednesday as demand for its products remained intact. [ID:nLT434268]

    Shares in RCS rose 1.2 percent at 0.9105 euros at 1512 GMT, matching a 1.3 percent rise in the DJ Stoxx index of media companies .SXMP. Mondadori was up 3.73 percent. (Editing by Rupert Winchester)

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