In view of the threat posed by Russia, Rheinmetall is likely to receive more orders from other countries as well.
(Photo: dpa)
Dusseldorf The German armaments group Rheinmetall is benefiting from the rearmament efforts of numerous countries as a result of the Ukraine war. As the company announced when the figures for the first quarter were published on Friday, sales remained roughly at the same level as in the same quarter of the previous year at EUR 1.3 billion. However, incoming orders increased significantly in several sectors.
Orders in the artillery and ammunition business grew to 1.1 billion euros, a fivefold increase compared to the previous year. Rheinmetall believes it has a good chance of being able to “make valuable contributions to strengthening defense capabilities” in the current security policy situation in numerous countries, said CEO Armin Papperger.
Despite stagnating sales, Rheinmetall was able to increase its operating profit from 84 million euros to 92 million euros. The company said the growth was primarily due to growth in the artillery and ammunition division. Rheinmetall primarily benefited from an order from Hungary worth several hundred million euros.
The business with military wheeled and tracked vehicles was also able to register a significantly higher order volume than in the previous year. Order intake between January and March 2022 rose from 220 million euros to 398 million euros. An order for Boxer vehicles from Great Britain had a particularly positive effect here.
Top jobs of the day
Find the best jobs now and
be notified by email.
Auto parts business is weakening
While the armaments sector is flourishing, Rheinmetall’s civilian supply business is suffering from the poor economic situation in the automotive industry. At the same time, sales of components and control systems fell by seven percent to 347 million euros. According to the company, the decline is mainly due to lower calls due to the global market decline.
On the other hand, Rheinmetall recorded growth in the civil sector, above all in technologies for electromobility. “With the growing share of sales in the area of alternative drives, we are on a promising path to advance the transformation of the industry and to leverage new growth potential for us,” said Rheinmetall CEO Papperger.
For the year as a whole, Rheinmetall still expects sales to increase by 15 to 20 percent, provided the federal government implements the announced upgrade programs. In reaction to the Russian attack on Ukraine, Chancellor Olaf Scholz had announced that he would invest 100 billion euros in the Bundeswehr over the next few years.
Shortly thereafter, Rheinmetall presented a list of quickly available military products, including tanks, trucks and ammunition. Rheinmetall also wants to deliver modernized versions of its older Marder armored personnel carriers and Leopard battle tanks to the Ukraine. In addition, the company expects that the demand for armaments will also increase in other countries.
Politicians have given clear signals that must now be translated into concrete measures, said Papperger. “We at Rheinmetall are prepared for this.”
More: Germany wants to deliver radar devices to Ukraine