As of: March 14, 2024, 1:11 p.m
By: Bona Hyun
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The war in Ukraine boosts the arms industry.
Rheinmetall in particular is making high profits – and wants to continue to increase business.
Berlin – The war in Ukraine is causing the arms industry to flourish.
Only recently, Rheinmetall announced that it would significantly increase production.
By 2025, Rheinmetall plans to produce up to 700,000 artillery shells per year.
To achieve this, the arms company also expanded its locations: the company wants to produce up to 200,000 artillery shells per year in a new ammunition factory in Lower Saxony.
Germany's largest arms company also wants to accelerate its growth course even more in 2024.
Rheinmetall is making strong gains because of the Ukraine war – and wants to increase business
As the company announced on Thursday (March 14) in Düsseldorf, sales rose by 12 percent to around 7.2 billion euros last year and net profit rose by nine percent to 0.6 billion euros.
The group missed its goal of generating sales of at least 7.4 billion euros in 2023.
He cited postponed projects as the reason.
In 2024, Rheinmetall is now targeting a sales volume “in the order of 10 billion euros”.
That would be a significantly stronger increase than in 2023.
Leopard 2A4 main battle tanks are in a Rheinmetall hall.
The war in Ukraine boosts the arms industry.
© Philipp Schulze/dpa
How good the gunsmiths' business prospects are can also be seen in the order backlog as of December 31, 2023: This stock shot up from 26.6 billion euros to 38.3 billion euros within a year, making it higher than ever before the company's history.
Figures are circulating that Rheinmetall earns 3,600 euros per floor.
Because of the war in Ukraine, demand for weapons is growing – Rheinmetall benefits
Rheinmetall sells tanks, artillery, anti-aircraft defense, military trucks and ammunition.
The administrative headquarters is in Düsseldorf and the largest factory is in Unterlüß, Lower Saxony.
The growth driver is the sharp increase in demand after the start of the Russian war of aggression on Ukraine.
Since then, NATO states have made a lot of money available to bring their military into shape.
However, it will take time for these government projects to result in concrete, long-term contracts and for money to flow.
Separate from the replenishment and modernization of the NATO armories, Rheinmetall also produces military goods for Ukraine, with funding from the federal government.
According to its own information, Rheinmetall is currently the sole ammunition supplier for Ukraine and supplies the armed forces with large quantities of new medium and large caliber ammunition of the types 20mm (Marder infantry fighting vehicle), 105mm (Leopard 1 main battle tank) and 120mm (Leopard 2 main battle tank).
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The defense company also secured a million-dollar deal.
Spain has ordered 94,200 artillery shells from Rheinmetall for its army.
The order has a volume of 208 million euros, Rheinmetall announced on Wednesday (March 13) in Düsseldorf.
The ammunition is scheduled to be delivered between the end of 2024 and the end of 2025.
The Spanish military is already using artillery shells from Rheinmetall, and a second framework agreement has now been concluded.
According to the information, one variant of these highly explosive projectiles has a maximum range of 40 kilometers, another variant of 30 kilometers.
As a result of the war in Ukraine, demand for 155-millimeter projectiles has risen sharply, and Rheinmetall's order books are correspondingly full.
The group's largest plant is in Unterlüß in Lower Saxony.
(bohy with dpa)