Danish brewer Royal Unibrew has seen its profits drop into the red for its first half, hampered by re-structuring costs.

Loss before tax totalled DKK16m (US$3m) for the first six months of 2008, compared to a profit of DKK37.5m for the same period last year, Royal Unibrew said today (26 August).

The owner of Denmark's Royal Beer said the drop was in-line with its expectations for the half, and was caused by extra costs associated with the disposal of its brewery in Aarhus.

Net revenue rose by nearly 14% to DKK2bn, while volumes increased by 12% to 3.8m hectolitres. Eastern Europe was the main growth driver, increasing revenues by more than a third and as much as 47% in Poland.

Unibrew said it had taken several measures to improve efficiency in the first half. These included tranferring production from Aarhus to its Faxe and Odense breweries, which is expected to increase earnings by DKK20m from 2009. The Aarhus site will also be sold for between DKK600 and DKK900m, while distribution network changes are expected to deliver another DKK30m from the second half of next year, it added.

The group warned that conditions for the rest of the year would remain difficult, accentuated by poor weather in Poland. "The group now expects marginally lower revenue and a less attractive product mix for all of 2008."