Wellington, Feb 20 NZPA - Fairfax Media, the parent company of one of New Zealand's two main newspaper chains, will announce its inerim profit on Monday.

Shares in the company fell below $A1 ($NZ1.29) this week on the back of reports that the six-month profit could fall by as much as 25 percent, the AAP newsagency reported.

Fairfax shares hit an all-time low of A97c on Wednesday - they traded at an all-time high of $A6.24 in March 2000 - before returning to trade around $A1.05 towards the end of the week.

Like most media groups Fairfax is suffering from a fall in advertising caused by the economic downturn.

"We've seen a lot of analysts downgrading that stock," CMC Markets senior dealer Dominic Vaughan told AAP.

"There's the depletion of advertising dollars, they're probably looking at diminishing sales in their classified pages".

Based in Australia, Fairfax owns The Dominion Post and The Press newspapers, and the websites stuff.co.nz and TradeMe in New Zealand, as well as a number of regional newspapers.

In Australia, it owns The Sydney Morning Herald and The Age newspapers and made a net profit of $A196.3 million in the first half of fiscal 2008, a rise of 37.8 per cent on the prior corresponding period. But media analysts believe the fiscal 2009 result for net profit, before unusual items, could fall by as much as 25 per cent.

Credit Suisse expects a decline of 16.4 per cent to $A164.1 million.

"We anticipate Australian publishing revenues will be down nearly 10 per cent, driven largely by classified revenues declining," it said.

Merrill Lynch has forecast Fairfax's first-half group revenue to decline by 1 per cent, and Australian publishing advertising revenue to fall by 6 per cent.

It expects a fall of 25 per cent in underlying net profit to $147 million.

Other commentators have said it is unclear whether the Fairfax board will need to raise funds to cope with debt-load: $2.3 billion required to be paid back by 2012. In December, Fairfax slashed dividends to allow its debt to be paid off more quickly.

Fairfax chief executive Brian McCarthy is reported to be considering merging sections of the SMH and The Age, possibly sports and business, similar to some moves made in New Zealand.

One Australian commentator, Margaret Simons, on the media website Crikey, reported senior staff in Fairfax newsrooms had been told that options include the combining of sections to run in both the Sydney Morning Herald and The Age, and amalgamating the group's Canberra-based press galleries.

"There have even been discussions at senior levels about sharing sub-editing with the organisation's New Zealand titles," she said.

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