UPDATE 1-Mediaset sees worst of difficult 2009 in Q1

* Predicts “especially difficult” 2009

* Sees worst of ad spending trend in Q1, signs of recovery

* Shares up 3.9 percent

(Recasts with analysts’ presentation)

By Deepa Babington

ROME, March 18 (Reuters) - Italy's biggest private broadcaster Mediaset MS.MI forecast a "particularly difficult" 2009 but said the worst should be over in the first quarter amid signs companies were resuming spending on advertising.

Mediaset, owned by the family of Italian Prime Minister Silvio Berlusconi, on Tuesday reported a 9 percent fall in 2008 profit, cut its dividend 11 percent and warned profit could slump again this year as the downturn hits advertising revenues.

But the company -- which like other free-to-air broadcasters relies overwhelmingly on advertising for revenues -- said firms like pasta maker Barilla had begun to re-invest in advertising after a sharp slowdown in spending towards the end of 2008.

“2009 is definitely a particularly difficult year,” chief executive Giuliano Adreani said in a presentation to analysts. “I think the first three months of the year will be the most difficult and then things could get better.”

He cited expectations of increased advertising by carmakers and other companies resuming investment in their brand as among positive indicators that signalled a recovery in advertisement spending in the second half of the year.

Mediaset stock was up 3.9 percent at 3.37 euros at 1255 GMT.

Its 2008 results, published after the market closed on Tuesday, beat analyst forecasts, especially at its pay-television business.

“We are reassured by management’s ability to manage costs in 2008 and we are slightly concerned about the worse than expected decline in Italian TV advertising in the first two months of 2009,” J.P. Morgan analysts said in a research note.

Deutsche Bank analysts said the 0.38 euro dividend for 2008 was at the top end of the forecastd range and that “strong momentum” remained on pay-TV revenues.

Mediaset was the latest free-to-air European broadcaster to warn of a troubled year ahead, after Britain's ITV ITV.L and Germany's ProSiebenSat.1 PSMG_p.DE sounded alarm bells on the severe advertising downturn earlier this month.

Commercial free-to-air broadcasters are among the most exposed media companies since they usually rely almost entirely on advertising, unlike pay-TV rivals who have subscription income to lean on. (Editing by Andrew Macdonald and Dan Lalor)