Ukraine war fuels business
Rheinmetall posts flood of orders
05/06/2022, 12:09 p.m
The armaments group Rheinmetall has every reason to be optimistic: With stagnating sales, profits are growing in the first quarter. The war in Ukraine is also causing a sharp increase in ammunition orders. An increase in sales is expected for the year as a whole – subject to one condition.
Against the background of the Ukraine war, the Rheinmetall armaments group continues to expect business to pick up significantly this year. In the first quarter, however, the company was not able to increase sales: Revenues fell minimally and, at around 1.3 billion euros, remained at the level of the same period last year, as the company announced in Düsseldorf.
The company was more profitable, the operating result rose by 8 million euros to 92 million euros. The net profit climbed by three million to 61 million euros. In addition, the order books filled up; in the artillery and ammunition division, for example, incoming orders increased fivefold to 1.1 billion euros. A major ammunition order from Hungary, worth several hundred million euros, played a central role here.
For the year as a whole, CEO Armin Papperger still expects a sales increase of 15 to 20 percent in the group – provided that Germany provides an investment package of a good 100 billion euros as planned to buy weapons and other armaments to get the Bundeswehr in shape bring. These purchases would take several years.
More orders due to threat situation
Shortly after the Russian attack on Ukraine, Rheinmetall presented a list of military products that were relatively quickly available, including tanks, trucks and ammunition. The Düsseldorf gunsmith hopes that the federal government will access at least part of the product list. In addition, given the threat posed by Russia, Rheinmetall is likely to receive more orders from other countries.
The armaments company wants to deliver Marder infantry fighting vehicles and Leopard battle tanks to the Ukraine – both of the models on offer are old, but are to be modernized. Company boss Papperger saw the quarterly figures as proof that Rheinmetall was continuing on its successful course.