Heineken today toasted a surge in profits as it started to benefit from its share of UK brewer Scottish & Newcastle which it bought with Carlsberg for £7.8 billion last year.

In the deal, Dutch brewer Heineken took over S&N's UK operations including Foster's, John Smiths and Kronenbourg 1664 while Danish rival Carlsberg took the Russian and French operations.

Heineken, the world's third-largest brewer, said the takeover helped it report a 20% rise in profits to €993 million (£870 million) for the first half of the year.

It admitted the profits were driven by cost savings as beer sales fell in the recession. It stripped out €50 million of costs in the first half through brewery closures and slashed marketing expenses.

Chairman and chief executive Jean-François van Boxmeer said: “The integration of S&N is now completed. There are clear signs that our specific plans to improve profitability and to strengthen our long-term market position in the UK are bearing fruit.”

However, he warned: “The economic and trading conditions remain difficult, and there will be continued pressure on volumes in the second half of 2009.”

Heineken has a 26% share of the UK market where beer sales fell 6.2% in the first half. It has put up prices to restore margins and added Amstel and Tiger beers to its regular UK portfolio.