Rheinmetall: Expects an increase in orders for tanks

Rheinmetall AG, the German manufacturer of tanks and artillery, said that countries around the world were increasing their defense budgets in the midst of the war in Ukraine, and that they expected orders to increase.

The company expects its defense operations to show orders of up to 31 billion euros this year and next, compared to 4.68 billion euros last year.

It expects sales growth of 15% -25% in 2023, and maintained estimates for organic sales growth of 15% -20% for the year.

The possible orders resulting from Germany’s decision to increase its defense spending will begin to arrive in the second half of the year, Rheinmettal said.

He expects to close orders of 13.3-17.5 billion euros from Germany for the period 2022-2023.

German Chancellor Soltz said in February he would invest 100 billion euros in armaments in response to the Ukraine war.

In total, it expects its defense departments to close orders of 13-15 billion euros this year and 14-16 billion euros in 2023.

The company stressed that operating profit for the first quarter increased by 10% to 92 million euros, while sales remained stable on an annual basis, at 1.27 billion euros.

Adjusted earnings and margins were higher than expected, while the (high-margin) arms and ammunition unit closed quarterly orders at 1.15 billion euros, up from 228 million euros, largely thanks to a large order from Hungary.

For the second quarter, it expects sales increase of 8% -10% and the operating margin to 7.5% -8.5%.