UPDATE 2-Finland's Sanoma to cut jobs, shut magazines in digital shift
* Media group to axe magazine titles and up to 570 jobs
* Reports Q3 operating loss 240 mln euros on new writedowns
* Says likely to pay lower dividend
* Analysts say Sanoma lacks growth plan (Recasts with decline in print, adds analyst comment, share reaction)
By Jussi Rosendahl
HELSINKI, Oct 31 (Reuters) - Finland's largest media group Sanoma said it plans to axe 32 of its 250 magazine titles and up to 570 jobs as more consumers and advertisers shift to digital media from its print publications.
The loss-making company which employs 10,000 staff, has been hit by shrinking advertising revenues but its problems also partly stem from its $1.3 bln purchase in 2011 of Dutch TV company SBS, which has since lost viewers and sparked a goodwill writedown.
Sanoma reported a third-quarter operating loss of 240 million euros due to new writedowns in the Netherlands and Russia. Its underlying profit fell 4 percent from a year earlier to 77 million euros as magazine advertising sales slumped 20 percent.
The company, which operates in 10 countries and produces learning materials and has television businesses in Finland and the Netherlands, said it has put its operations in Russia, Central Eastern Europe and Belgium under strategic review.
Sanoma warned it would likely pay lower-than-usual dividends in the near-term.
It paid a final dividend of 0.6 euros for 2012. Its dividend yield was 3.6 percent, below publishing sector peers which are forecast to yield 5 percent in the coming year.
Sanoma wants to put more focus on its digital offerings and the Finnish and the Dutch markets. Its digital sites contributed 11 percent of its total media sales in the last reported 12 months.
Analysts said Sanoma faces a difficult task as it looks to take its magazine business into the digital market, adding the company needs a more concrete growth plan.
"The sector is very much like the European paper industry: you can't save it only by cutting, you will need to find new growth areas," said analyst Teemu Vainio from Pareto Securities.
Sanoma said it would shed around 500 of around 2,200 staff in the Netherlands and 70 in Finland, mostly from magazines and newspapers. It is now aiming to save 100 million euros ($138 million) a year, up from a previous target of 60 million euros in savings.
Sanoma's German peer Axel Springer has also recently sped up its digital initiatives while scaling back traditional operations. Its digital media accounts for 40 percent of its revenue.
Sanoma stock, which fell to all-time lows in August, were down 1.7 percent at 6.55 euros by 1056 GMT.
"Investors will face a couple of very tough couple of years with this company. There is a lot of uncertainty, and the dividends will be small. Also, if the restructuring doesn't go out as planned, there is pressure for new write-downs," said analyst Sauli Vilen from Inderes Equity Research. ($1 = 0.7262 euros) (Editing by Ritsuko Ando and Elaine Hardcastle)
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