Rheinmetall rides high on Ukraine war and European demand

Germany’s Rheinmetall is booming on earnings driven by the war in Ukraine, particularly the massive demand for ammunition, and European countries looking to strengthen their defensive posture, particularly those closest to Russia.

The company reported that for the first quarter of 2024, consolidated sales climbed by €218 million or 16% to €1.581 billion compared to the same period in 2023 of €1.363 billion, which, when adjusted for currency effects, is up 17%.

Operating earnings amounted to €134 million as of 31 March, up on the previous year’s figure of €83 million.

According to the company “the improvement in operating earnings relates in particular to the strong contribution by Rheinmetall Expal Munitions, which was acquired in the previous year.”

The Weapon and Ammunition division generated sales of €362 million in the first quarter of 2024, outperforming the figure for the previous year by €149 million or 70% and key projects included artillery orders for Germany and Ukraine.

The backlog for the division more than doubled, rising by €6.394 billion or around 123% to €11.6 billion as of 31 March. The main factor driving this was the signing of two multi-year multi-billion Euro ammunition framework agreements in the second half of 2023 for the German government and the Ukrainian armed forces.

Sales in in the company’s vehicle systems business were up by €31 million or around 7% year-on-year at €493 million for the first three months of 2024 with the company noting “the increase in sales relates to projects for the delivery of tactical vehicles in particular".