Italian publisher RCS MediaGroup (RCS.MI) said Monday its 2008 core earnings fell 26% on weak advertising and add-on sales, coupled with tough conditions in its core markets.

RCS said it posted full-year earnings before interest, taxes, depreciation and amortization, or Ebitda, of EUR266 million, compared with EUR360.3 million a year earlier, according to preliminary data.

In a statement, the company also said investments in the new media sector and new editorial initiatives weighted on core earnings.

Revenue fell 2.4% to EUR2.67 billion, from EUR2.74 billion a year earlier, due to a "strong acceleration" in the contraction of advertising spending in the second half of the year.

RCS, which publishes Italy's leading newspaper Il Corriere della Sera, said its Spanish unit Unidad Editorial has reached an agreement with Grupo Bermont to create a new company in the printing sector with an estimated revenue of over EUR80 million.

The Italian publisher said Monday its net debt stood at EUR1.15 billion at the end of December, up EUR180 million from the end of 2007, due to acquisition investments.

Analysts said 2008 was substantially in line with expectations, with net debt slightly above forecasts.

At 1517 GMT, RCS shares were up 0.3% at EUR0.74, in line with the overall market.

In December, RCS said it expects a further, significant reduction in 2009 revenue, especially in the advertising sector, due to uncertainties related to the global economic crisis.

At the time, RCS also said its 2008-2010 business plan is obsolete and may be revised in the second half of 2009 when there will be increased visibility on the economic outlook.

-By Giada Zampano, Dow Jones Newswires; 39 06 69766925; giada.zampano@dowjones.com
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