Fairfax Media says its second half revenue is down by 4.5 per cent and it does not expect market conditions to improve enough to recover the decline before the end of the financial year.

The stock slumped 10 cents, or 7.63 per cent, to $AU1.21, the lowest since March 16.

The diversified publishing house, which owns New Zealand newspapers such as the Dominion Post and The Press as well as the Stuff website, said on current trading trends, it expected earnings before interest, tax, depreciation and amortisation (EBITDA), excluding significant items, of around $600 million for the year to June 30.

That would be a fall from the previous financial year's $639.1 million in EBITDA.

The second-half revenue fall from the previous corresponding period is at the lower end of Fairfax's guidance, issued in February.

The company had forecast second half revenue in a range of plus or minus five per cent, due to its inability to predict whether retail advertising would pick up from its first-half lows.

In a statement issued today, Fairfax said the rate of decline in advertising levels had abated slightly in the past month but it did not anticipate market conditions in the remainder of the current financial year to offset the declines to date.

Chief executive Greg Hywood said ad markets remained weak.

"The overall softness is consistent with trading conditions reported by major clients and reflects poor consumer sentiment," he said.

"Revenues have also been directly affected by the flood conditions experienced in key markets early in the second half and the continuing impact of the Christchurch earthquake."

The Australian metropolitan and New Zealand publishing businesses had experienced the revenue declines, while regional and online publishing and radio had seen revenue growth in the second-half, Hywood said.

"The relative strength of the Australian currency against the New Zealand dollar has had a negative impact on the translation of revenues and earnings from our NZ publishing and Trade Me businesses," he said.

Fairfax also flagged several significant items expected to affect its full year earnings, relating to operational changes brought on by the 2010 strategic review.

"Streamlined production processes" in the company's Australian and New Zealand publishing, printing and distribution businesses are aimed at reducing costs and "allowing reinvestment in quality journalism", Mr Hywood said.

There would be a one-off redundancy cost of approximately $25 million relating to these measures to be recorded in the 2011 financial year.

The changes would reduce net annual costs by approximately $15 million from the 2012 financial year, Hywood said.

Included in the changes is the outsourcing of sub-editing duties to the AAP Pagemasters business, also announced today.

That includes sub-editing general news, business and sport for Fairfax titles such as The Sydney Morning Herald, The Sun-Herald, The Age and The Sunday Age.

Hywood said the operational changes would allow investment in quality, independent journalism.