UPDATE 3-Independent News H1 earnings dip, diversity helps

(Adds CFO, COO comments, share data)

By Jodie Ginsberg

LONDON Aug 27 (Reuters) - Newspaper and communications group Independent News & Media (INME.I) posted a drop in first-half earnings as expected on Wednesday and said full-year profit should meet consensus forecasts for a slight fall.

The publisher (INME.L) of Britain's Independent newspaper, the Irish Independent and titles in South Africa, Australasia and India reported a 6.3 percent drop in diluted EPS before exceptional items to 7.5 euro cents in the six months to end-June.

However, that is better than some of its media peers, largely thanks to its broad geographic reach.

British regional newspaper group Johnston Press (JPR.L), also reporting results on Wednesday, missed market expectations for first-half sales on the back of a 10 percent decline in advertising revenues.

Independent News & Media's advertising revenue, including acquisitions, was up 2.8 percent in underlying terms.

Its revenues in the period slipped 3.7 percent to 780.4 million euros ($1.15 billion), though the group said this was mainly due to adverse currency movements.

INM said it was a good performance in a market experiencing tough economic pressures and advertising volatility.

"Assuming a continuation of the first-half advertising trends, INM believes that it will achieve profits in line with consensus forecasts for the full year," Chief Executive Anthony O'Reilly said in a statement.

Chief Financial Officer Donal Buggy pointed to those analysts in particular who have recently changed their forecasts due to worsening economic conditions and see between 17.5 and 18 cents of adjusted EPS, compared with 18.8 cents in 2007.

"That is down on last year, but it's down mainly because of the increase in the shares in issue," Buggy told Reuters.

Analysts noted that advertising revenues were difficult to forecast in a challenging market and the period leading up to the Christmas period would be critical.

"We retain the view that the global diversity of INM earnings and exposure to emerging markets, such as India and Indonesia, should mitigate the impact of the downturn in the more mature markets," analysts at Goodbody said in a note.

Shares in Independent News traded 3.6 percent lower in Dublin by 1110 GMT at 1.37 euros, compared with a 0.5 percent weaker Irish market.

South Africa was the group's best performer, posting a 7.7 percent decline in revenue but a 31.5 percent rise in operating profit.

"If you look at our performance on a constant currency basis...all our markets were ahead with the exception of the UK, which only showed a revenue contraction of 1.3 percent," said Chief Operating Officer Gavin O'Reilly.

(Additional reporting by Andras Gergely in Dublin; Editing by David Cowell)