TUI growth as tourists avoid North Africa

German tourism and shipping group TUI AG abandoned its forecast for higher 2011 profits on Thursday as uprisings in North Africa put tourists off and in the face of a tough shipping environment.TUI, which owns Europe’s largest tour operator TUI Travel, reported an 11 per cent fall in third-quarter underlying earnings and said profits for the year to September will now only be in line with the prior year. The company said in May it expected profits to rise “Earnings benefited from higher customer volumes and better average prices. On the other hand, they were impacted more strongly than expected by the impact of the unrest in North Africa,” TUI said in a statement on Thursday. The tourism division accounts for the vast majority of turnover and includes TUI Travel as well as TUI AG’s own hotel and cruise operations. The uprisings particularly affected bookings from customers in France and TUI’s hotels in Egypt, the group said. London-listed TUI Travel is, however, coping better than rival Thomas Cook and reported solid trading in the UK on Wednesday.Shares in TUI AG were up 1.9 per cent at 0711 GMT, while TUI Travel was up 1.1 per cent. The MDAX index for mid-caps was up 3 per cent. TUI said the weak US dollar had led to a 9 per cent decline in turnover at shipper Hapag-Lloyd in the quarter, although it had managed to keep freight rates almost stable.In a separate statement, Hapag-Lloyd said freight rates had gone from an average of $1,563 per twenty-foot equivalent (TEU) in the first quarter of the 2011 calendar year to $1,546 in the second. Silvia Quandt analyst Stefan Kick said the stable freight rates came as a surprise given that Neptune Orient Lines, the world’s seventh largest container shipping firm, had reported a drop in rates.TUI is looking to divest its 38.4 per cent stake in Hapag-Lloyd, and sources told Reuters last month that turbulent markets and low freight rates had delayed the process.  TUI has set out three options for the stake-a sale, flotation, or exercising a put option to sell it to the Albert Ballin consortium that owns the majority of Hapag-Lloyd.For the fiscal third quarter to end-June, TUI AG reported turnover up 9 per cent to 4.39 billion euros ($6.18 billion) and underlying earnings before interest, tax and amortisation of 96.2 million.