Telegraaf publisher to cut 425 jobs after H1 loss

(Adds details, background, analyst comment)

AMSTERDAM, Aug 15 (Reuters) - Telegraaf Media Groep , the Netherlands' biggest newspaper publisher, said it needed to make "more drastic" cost reductions, including at least 425 job cuts, to battle rising costs and lower advertising sales.

TMG said on Friday an impairment charge and lower advertising revenues sent it to a first-half net loss of 175.5 million euros ($262 million), compared with a profit of 39.7 million a year earlier.

"In terms of the macro economic trends, it is clear that all signals are red," TMG said in a statement, saying it faced rising wage and energy costs, and it expected advertising revenues to remain under pressure in the second half.

The publisher said the job cuts, to boost long-term margins, would come from "normal attrition" and possibly layoffs, and it would need to take additional restructuring costs into acount from the second half.

Shares in TMG, owner of the country's biggest-selling daily De Telegraaf, were down 0.8 percent at 16.97 euros, while the Amsterdam small index was up 0.35 percent.

First-half sales fell 1.4 percent to 360 million euros. The earnings before interest, taxes and amortisation (EBITA) margin fell to 7.3 percent from 8.7 percent. TMG reiterated its 2008 margin target of at least 8 percent.

It is seeking annual cost savings of 40 million to 50 million euros as it targets a 15 percent EBITA margin.

"Although we expect the advertising market to deteriorate further, we see a number of positive company specific triggers for the next six to 12 months," Rabo analysts said in a note, adding that the savings exceeded its assumed 20 million euros.

The company was forced to exercise an option to buy 12 percent of German broadcaster ProSiebenSat.1 from private equity firms, resulting in a 185 million euros impairment charge.

The purchase of ProSiebenSat.1 shares was triggered after a holding company controlled by KKR [KKR.UL] and Permira exercised a put option, or a right to sell its stake in the German broadcaster, at 28.71 euros per share.

Since TMG is buying the stake well above ProSiebenSat.1's then share price of 5.42 euros, for a total 377 million euros, it is writing down the value of its stake.

As well as the job cuts, TMG said it would continue to divest unprofitable operations, seek acquisitions and outsource activities. (Reporting by Aaron Gray-Block; Editing by Quentin Webb)