German shipping company Hapag-Lloyd posted a sharp fall in third quarter profit due to currency swings and said the industry's growth prospects were clouded by the euro zone debt crisis and the big US budget deficit.

Hapag-Lloyd, whose fleet consists of 147 container ships, reported third-quarter sales down 13 percent at US$2.1 billion, while earnings before interest and tax (EBIT) fell to $46.14 million from $356.65 million a year ago, reported Reuters.

The group′s earnings, financial and net asset position were considerably affected by exchange rate movements between the euro and the dollar in the first nine months of the 2011 financial year," Hapag-Lloyd said.

Hapag-Lloyd reports in euros, but the industry's billing currency is dollars.

This year the euro rose from a low of around $1.2903 on January 10 to a peak of around $1.4939 on May 4. The volatility continued into October, which saw swings to $1.4247 from below $1.3181. The euro is at around $1.35 now.

The shipping industry is also suffering from lower freight rates as a result of increased capacity coming online and tougher competition on routes to and from Asia.

"Given the challenging conditions that all liner shipping companies are still facing, our operating result is satisfactory," chief executive Michael Behrendt said.

The difficult economic climate, the ongoing currency swings, increased competition in Asia and high bunker and energy prices would have an adverse effect on both the industry and Hapag-Lloyd in the last months of 2011, the company said.

"The short-term prospects for the industry remain shrouded in uncertainty due to increasing imbalances in global economic developments and the potentially steep downturn in global economic growth," it said.

Hapag-Lloyd said the average freight rate in the third quarter was $1,529 per TEU, a 8.5 percent fall on the same period a year ago.

Hapag-Lloyd is owned by a consortium of Hamburg-based investors and tourism group TUI. The latter is looking to exit its 38 percent stake to focus solely on its tourism business.

Source: CargonewsAsia.