Reach has reported digital revenue up 9.3% on last year, while print revenue was down 4.2% and overall group revenue fell by 0.9%.
The media group - which includes Insider and the Daily Record - stated that a "more challenging market" has impacted the digital growth rate and market yield, reflected in lower advertising demand.
Print "remains resilient", with action being taken on cover prices to strengthen circulation revenue, while "mitigating actions" are in place to help offset further newsprint inflation.
The trading update for the four months from 27 December to 24 April 2022, came ahead of today's Annual General Meeting.
Over the past two months, the market has experienced reduced advertiser demand and lower average yields, with the war in Ukraine significantly reducing the level of 'brand safe' content for news publishers, the statement noted.
"While this has led to lower growth than expected, we are improving the quality of our digital sales, with strong growth in our higher yielding revenues becoming a bigger part of the mix."
Since the middle of March, Reach has seen further inflation in operating costs, particularly within print, where the impact of paper cost increases exceeding previous expectations. "We have taken additional measures to help offset this including, the acceleration of efficiency plans, changes within print production and actions around print cover prices."
The group still anticipates broadly flat group revenue for the year, though with a higher mix of circulation revenues and lower digital contribution than previously expected, as a result of more challenging trading conditions.
The impact of further recent newsprint inflation is reflected in cost expectations for the current financial year, with actions now underway to help mitigate the impact on operating profit.
Chief executive Jim Mullen commented: "We're developing a more sustainable and profitable long-term future for the business, with delivery of the strategy progressing well, despite a more challenging economic backdrop.
"The effective collection and use of data are supporting the growth of our higher yielding digital products, which are becoming an increasing part of our revenue mix.
"We've taken swift action to address the impact of inflation on our cost base and the business remains strongly cash generative, supporting the investment in data and technology that is key to future growth."
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