Independent News & Media has reported pre-tax profits of €96.6m for the first half of 2008, up slightly from €94.1m a year earlier.
The media group said revenue fell 3.7% to €780.4m, though there was a 3% increase when currency movements were stripped out. It said underlying advertising revenue rose by 2.8% despite tough market conditions.
Operating profits, excluding exceptional items, were flat at €154m, though currency movements again hit this figure. Adjusted earnings per share fell 6.3% to 7.5 cent while an unchanged interim dividend of 4.57 cent will be paid.
INM said it tried to cope with the volatile advertising market by cutting costs and increasing prices in some areas. Chief executive Dr Tony O'Reilly said he believed the company's profits would be in line with expectations for the full year, though trading in the three months before Christmas would be 'critical'.
Dr O'Reilly said the company's business model provided 'resilience' against the current economic downturn, but major shareholder Denis O'Brien said he was 'alarmed' by the results.
A breakdown showed that INM's Irish profits were down almost 4% to €47m on flat revenue of €199.3m. Advertising revenues were down 5.7%, hit by weaker property and recruitment.
UK profits also slipped, by 35.6% to €4.7m, as revenue dropped 14% to €115.6m. Revenue and profits were down even when the effects of sterling's weakness were stripped out.
The company's second biggest shareholder, Denis O'Brien, said he was 'alarmed' by the results. Mr O'Brien, who holds 25% of the company, said revenues had fallen and the company's UK performance 'seems to be in freefall'.
He also expressed concern about an €88m increase in debt levels and the contribution to total revenue being made by new media businesses.
'It seems clear to me that decisive moves are urgently needed, perhaps starting with a close look at whether The Independent and Belfast Telegraph are contributing anything worthwhile to the group and then addressing the group's large and unwieldy board structures,' Mr O'Brien's statement said.
Earlier this year Mr O'Brien commissioned a report which criticised the size and structure of INM's board, but the company commissioned a separate study which rejected these findings and said the board was 'functioning effectively'.
