Rheinmetall Hits Record Order Book of €48.6B Amid Rising Sales
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German automotive and arms manufacturer Rheinmetall AG (RNMBY:US) has set a record with an order book valued at €48.6 billion as sales and profits rise sharply amid ongoing conflicts in Ukraine and Gaza. The Düsseldorf-based defense group reported a 33% increase in sales for the first half of the year, reaching €3.8 billion. Operating profit nearly doubled to €404 million, driven by higher demand for weapons and munitions.
CEO Armin Papperger attributed the significant boost in profitability to increased sales, which he expects to continue growing by approximately €2 billion annually in the coming years. Key projects this year include artillery orders for Germany and Ukraine, with the largest contract being a €2.2 billion deal with the Bundeswehr for Boxer armored vehicles, including service.
Papperger noted that defense spending is accelerating, and he has been vocal in advocating for military support for Kyiv. His plans to build factories in Ukraine focused on tank maintenance, munitions, and air defense have drawn criticism from the Kremlin. The Russian foreign ministry recently labeled Rheinmetall's planned Ukrainian munitions factory as a "legitimate target" for Russian military action.
Rheinmetall had business dealings with Russia up until 2014 when Berlin withdrew its export license following Russia's annexation of Crimea. Before the escalation of the war in Europe, over a third of Rheinmetall’s sales were from non-military sectors, such as automotive sensors. The company no longer reports automotive sales separately. Still, its power systems division, which serves civil markets, saw only slight growth to just over €1 billion, impacted by weak sales in Europe.
Rheinmetall's share price rose by over 2% in early trading on Thursday, reflecting its strong performance, largely attributed to contracts with armed forces in Germany and partner states in the EU and NATO.
On the congressional trading front, Congresswoman Susie Lee reported buying shares worth up to $15,000 of Arms manufacturer Rheinmetall AG on May 10, 2024. What intrigues her purchase is that the lawmaker serves on the House Committee on Appropriations, which further subheads Military Construction, Veterans Affairs, and Related Agencies.
