UPDATE 1-Italy's L'Espresso H1 net down 27 pct, to cut jobs

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MILAN, July 23 (Reuters) - Italian publisher L'Espresso (ESPI.MI: Quote, Profile, Research) posted a 27.1 percent drop in net profit in the first half of 2008 as sales and advertising revenue slowed, more than offsetting cost cuts, the company said on Wednesday. Excluding one-off items linked to a change in rules on the accounting of severance payments, net profit fell 13.6 percent to 36.4 million euros ($57.27 million), L'Espresso said.

The company, which publishes popular Italian daily La Repubblica, reiterated a forecast for falling profits this year, even excluding one-off items.

It also said it planned to lay off about 100 people in the next three years, in order to achieve cost savings of around 40 million euros per year.

"First half 2008 results have been affected by the negative trends of revenues (advertising and sales), only partly compensated by other positive factors (optional products) and cost improvements," the company said in a statement.

Revenues fell 3.3 percent to 543.2 million euros.

In January to June, advertising revenues fell 3.7 percent in to 323.3 million euros, despite an increase in local and Internet ad spending.

L'Espresso is the first Italian media company to report first-half results, as a worsening outlook for the domestic economy feeds concerns about advertising spending.

Publisher Mondadori (MOED.MI: Quote, Profile, Research) and broadcaster Mediaset (MS.MI: Quote, Profile, Research) -- both controlled by the family of Italian Prime Minister Silvio Berlusconi -- will publish first-half results next week.