BRUSSELS, August 14, 2008 (AFP) - Belgian-Brazilian brewing giant said on Thursday it raised second-quarter net earnings by 8.6 percent to 542 million euros (806 million dollars) despite rising energy and input costs.

The company, already the world's largest brewer but which is trying to swallow its American competitor Anheuser-Busch, beat the forecasts of analysts, who had expected the company to report a drop in earnings.

'While we are far from satisfied with our performance year to date, the second-quarter results already show an improvement versus our first quarter,' the company said in a statement.

'This performance is in line with expectations as stated during our first-quarter results.'

'Although industry growth in some key markets is below last year, we delivered market share results in the majority of our markets,' the company's Chief Executive Carlos Brito said.

'The main market where we have underperformed so far this year has been Russia, where our value and price brands have lost share at a faster pace than we have been gaining share with our core and premium brands, as evidenced by net sales per first-half growth of 12 percent,' he added.

Sales also showed some weakness in Brazil, another key market.

Elsewhere in North and Latin America and Asia-Pacific 'results were positive'.

'However despite maintaining or gaining market share in Belgium, Germany and the UK, own beer volumes in Western Europe were 1.4 percent lower,' the company said.

'Our overall pricing is healthy, but rising costs continue to put pressure on our margins.'

The group repeated that it expects its merger with US rival Anheuser-Busch to be completed this year.

The company said that total beer and soft drink volumes rose marginally in the latest quarter to 68.43 million hectolitres from 68.17 million in the same quarter last year.

In fact while net profits edged up, revenue slipped by 0.3 percent year-on-year from 3.72 billion euros (5.54 billion dollars) to 3.71 billion euros