* 2008 results in line
* 2009 ad revenues down 36 pct
* No final dividend (Adds further details, quotes)
LONDON, March 11 (Reuters) - British regional newspaper group Johnston Press JPR.L axed its final 2008 dividend on Wednesday after saying its advertising revenues in 2009 to date were down 36 percent.
The group, which has been especially hard hit by its high exposure to local classified advertising and sectors such as employment, housing and motoring, posted 2008 results in line with forecasts, with operating profit down 28 percent.
But it said it expected 2009 to be a very challenging year with revenues significantly below 2008 levels and only partially offset by lower costs.
Johnston launched a deeply discounted rights issue in 2008 and cost savings to prevent it breaching debt covenants following a downturn in advertising.
“We are benefiting from the full effects of the 2008 cost reduction programme with more initiatives in place which will drive further efficiencies,” the group said.
“Costs for the first two months of 2009 are running 15.7 percent down on the same period in 2008.
“The board has decided to recommend no final dividend payment. The board continues to believe that the most important use of available cash in the current environment is to reduce the group’s indebtedness.”
Advertising revenues were down 17 percent in the UK in 2008 and down 23 percent in Ireland.
Group revenues in 2008 were down 12 percent to 532 million pounds ($735.5 million), in line with analyst forecasts, and operating profit before non-recurring items was down 28 percent at 128 million pounds, ahead of forecasts at 121, according to Reuters Estimates.
The group took a non-cash impairment charge of 417.5 million pounds against publishing titles and goodwill. Its year-end net debt was 476.8 million pounds, which would have been 41 million lower if sterling had not weakened against the euro, it said.
The 476.8 million pounds was 214.9 million pounds lower than last year, mainly due to proceeds from the equity fund raising.
Reporting by Kate Holton; Editing by Rupert Winchester