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Commercial broadcaster ITV has reported a slump in first-half profits amid lower advertising revenues and profits for its flagship channel.

The company's earnings before interest, tax and amortisation in the six months to June 30th fell to £151 million, down from £202 million for the same period in 2006.

Group advertising revenues slumped to £717 million during the first half, down from £752 million in the previous year.

The drop was driven by a fall in revenue generated by ITV1, which fell to £595 million – down from £654 million recorded for the first half last year.

Nonetheless ITV bosses remain upbeat about the performance of Britain's largest free-to-air commercial broadcaster.

The company expects ad revenues at ITV1 to climb by one per cent over the third quarter, when total net advertising take is also expected to increase by four per cent.

ITV executive chairman Michael Grade stressed that the "revitalisation" of ITV1 had continued over the first half, with signs that a decline in ratings for the channel had slowed as a result.

"We have seen some encouraging early signs of recovery as ITV1's performance begins to stabilise in the first six months of 2007," said Mr Grade.

"Ratings decline has slowed and the advertising environment continues to improve, as the UK television advertising market in the first half was essentially flat and is growing in the
third quarter," he explained.

Meanwhile ITV, which like other commercial broadcasters has struggled to maintain ad revenues in the wake of competition from internet and digital channels, said that it had been working to "accelerate" the growth of its digital offerings over the first half.

During the first half ITV2, ITV3 and ITV4 produced 42 per cent of the broadcaster's multi-channel revenue growth, ITV revealed.

The company has also been focussing on developing its consumer businesses, with Mr Grade describing the launch of ITV.com as "a valuable opportunity" for the group to compete effectively for online revenues for the first time.

First half revenues for ITV's Friends Reunited website were also up 38 per cent in the first six months of 2007.