Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Rheinmetall has amassed a record order book worth €48.6bn, as sales and profits at Germany’s largest defence group continue to surge amid wars in Ukraine and Gaza.
The Düsseldorf-based group on Thursday said sales in the first half of the year increased by a third to €3.8bn, while operating profit nearly doubled to €404mn on the back of rising orders for weapons and munitions.
Chief executive Armin Papperger said profitability had increased “significantly” due to the boost in sales, which he expected would continue to rise annually by roughly €2bn “in the coming years”.
The group said key projects had included artillery orders for Germany and Ukraine, with the largest order in the year to date being a contract with the Bundeswehr for Boxer armoured vehicles worth a total of €2.2bn, including service.
“The supercycle [in defence spending] is clearly accelerating,” added Papperger, who is believed to have been the target of a foiled Russian assassination plot earlier this year.
Papperger, who has become a kingpin in European armament and a loud proponent for military support for Kyiv, has drawn the ire of the Kremlin by announcing plans to build a string of factories in Ukraine, focused on tank maintenance, munitions and air defence.
The Russian foreign ministry said last week that Rheinmetall’s Ukrainian munitions factory, which is scheduled to be operational within two years, was a “legitimate target” for the Russian military, according to reports from Reuters and Al Jazeera.
Rheinmetall was doing business with Putin’s regime as recently as 2014, when Berlin withdrew its export license in light of Russia’s annexation of Crimea.
Before the breakout of full-scale war in Europe, more than a third of Rheinmetall’s sales had been in non-military graded parts such as sensors for the automotive industry.
The company no longer breaks out automotive sales but on Thursday said that sales in its power systems division “which bundles the technological expertise in civil markets” grew only slightly to just over €1bn, weighed down by lagging sales in Europe.
Rheinmetall, whose share price rose by over 2 per cent in early trading on Thursday, added that its improved performance came down to “business with the armed forces in Germany and partner states in the EU and Nato”.
Read the full article here
