Rheinmetall accumulates record orders amid Ukraine and Gaza wars
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Rheinmetall has amassed a record 48.6 billion euro order book as sales and profits at Germany’s biggest defence group continue to soar amid wars in Ukraine and Gaza.
The Düsseldorf-based group said on Thursday that sales in the first half of the year rose by a third to 3.8 billion euros, while operating profit nearly doubled to 404 million euros thanks to increased orders for weapons and ammunition.
Chief executive Armin Papperger said profits had risen “significantly” thanks to increased sales, and he expected sales to continue to grow annually by around €2bn “in the coming years”.
The group said key projects included artillery orders for Germany and Ukraine, with the biggest order of the year so far being a contract with the Bundeswehr for Boxer armoured vehicles worth a total of €2.2 billion, including services.
“Super cycle [in defence spending] was clearly accelerating,” said Papperger, who was said to be the target of a Russian assassination plot foiled this early year.
Papperger, who has become a tycoon in the European arms industry and a strong advocate of military support for Kyiv, angered the Kremlin by announcing plans to build a series of factories in Ukraine focused on maintaining tanks, ammunition and air defense.
Last week, the Russian Foreign Ministry said Rheinmetall’s ammunition plant in Ukraine, which is expected to be operational within two years, is a “legitimate target” of the Russian military, according to reports from Reuters and Al Jazeera.
Rheinmetall continued to do business with the Putin government until 2014, when Berlin revoked the company’s export license after Russia annexed Crimea.
Before all-out war broke out in Europe, more than a third of Rheinmetall’s sales were from non-military-grade parts such as sensors for the automotive industry.
The company no longer reports car sales but said on Thursday that sales in its power systems division, which “brings technological expertise to the residential market,” rose only slightly to just over €1 billion, hurt by slowing sales in Europe.
Rheinmetall, whose shares rose more than 2 percent in early trading on Thursday, added that the company’s improved performance was due to “business with the armed forces in Germany and partner countries in the EU and NATO”.
