German tourism and shipping group TUI AG abandoned its forecast for higher 2011 profit, 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 percent fall in third-quarter underlying earnings and said profit for the year to September will be flat.

The company had said in May it expected profit 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 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 and the bomb attack in Marrakesh in April particularly affected bookings from customers in France, as well as 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, which have underperformed the STOXX 600 Europe Travel & Leisure <.SXTP> by 40 percent so far this year, were up 4.3 percent at 6:24 a.m. EDT in choppy trade, while TUI Travel was down 3.0 percent.

TUI said the weak U.S. dollar had led to a 9 percent 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) from January to March to $1,546 in the three following months.

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 AG's Chief Financial Officer Horst Baier said the fact Hapag-Lloyd had been able to keep rates stable was down to good capacity management.

TUI is looking to divest its 38.4 percent 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.

Baier declined to provide details on the ongoing sale negotiations, though he admitted that the market for initial public offerings (IPOs) was difficult at the moment.

It may be that the situation for IPOing Hapag-lloyd is different a couple of months from now, he told analysts.

For the fiscal third quarter to end-June, TUI AG reported turnover that was up 9 percent to 4.39 billion euros ($6.18 billion) and underlying earnings before interest, tax and amortization of 96.2 million.

Analysts were expecting the group to report third-quarter sales of 4.29 billion euros and underlying EBITA of 92.8 million, according to a Reuters poll.

($1=0.7099 euros)

(Reporting by Victoria Bryan; Editing by Andrew Callus and Mike Nesbit)

Egypt United kingdom