Germany’s Leopard tank movement draws attention to its manufacturer: Rheinmetall |
FRANKFURT, 25 january (Reuters) – Armin Papperger is spinning.
The chief executive of German defense champion Rheinmetall ( RHMG.DE ) on Tuesday raised the group’s medium-term sales forecast, expecting an unexpected reduction in rising defense spending due to the war in Ukraine.
A day later, Germany’s long-awaited decision to send heavy Leopard tanks to Ukraine sent shares of the nearly 134-year-old firm, which Rheinmetall co-produces with peer Krauss-Maffei Wegmann, to a record high.
This is about a two and a half times increase over the past year to the manufacturer of tanks, ammunition and other military equipment 10 billion euro (11 billion dollars) has added value, potentially introducing it to Germany’s blue-chip DAX (.GDAXI) system. ) index.
For the 59-year-old Papperger, who has led the company for the past decade, Russia’s intervention in Ukraine not only illuminates the group’s business prospects, but also Germany’s military has caused a change of perception in a nation that has traditionally criticized its role in conflicts.
Papperger, an amateur hunter who keeps miniature models of tanks in his office, said in an interview with the German magazine Stern this week: “Before, they insulted us and sometimes threatened us. Today, people say and write to me: “Thank God that you are with us.” .
Part of the “Zeitenwende” announced by Chancellor Olaf Scholz – which lasted for decades military shift to a more assertive foreign policy after attrition – Wednesday’s move comes after growing pressure on Kiev to send better military equipment.
Papperger, a trained engineer who joined Rheinmetall in 1990, says, “I wonder what guns can do. But I also wonder what could happen when there are no weapons. You can see this in Ukraine now.”
Founded in 1889 to supply the then German Empire with munitions, Rheinmetall continued to be a major arms supplier to the German military during both World War I and World War II, during which the company was temporarily nationalized.
‘precious’
Today car The company, which is also a major supplier to the military sector, employs more than 25,000 people worldwide and manufactures Puma and Marder infantry fighting vehicles, as well as several types of ammunition, in addition to the Leopard main battle tank.
Rheinmetall’s direct deliveries to Ukraine so far include drones, ammunition, military used for fighting trucks and a field hospital weather had anti-attack systems.
The group said it could deliver a total of 139 Leopard tanks – 51 of the Model 2 and 88 of the older Model 1 – to Ukraine. Rheinmetall said that more than 29 of the Leopard 2A4 tanks April or may be delivered by May.
Analysts at Stifel Equity Research estimate that the Leopard delivery could generate between €300 million and €350 million in sales for Rheinmetall this year and next.
That’s 7.6 in 2023, according to Refinitiv’s estimates billion As the sole qualified supplier of Leopard 2 munitions, the group could see a significant increase in earnings, although it accounts for a fraction of total sales seen in euros, Stiefel said on Wednesday. .
Ammunition sales could boost Rheinmetall’s core earnings by 32 million euros per month, doubling the group’s monthly profits based on figures released for the first nine months of 2022, the broker estimates.
UBS analysts warned that while Rheinmetall’s shares were largely priced in on future defense orders, they were yet to materialize.
Papperger also announced this week that Berlin Scholz last year 10He called for a rapid transformation of his €0bn special military budget into firm orders, saying industry was ready to deliver but needed planning precision.
“All German industry is ready,” he said at an industry event.
($1 = 0.9197 euros)
Reporting by Christoph Steitz Editing by Tomasz Janowski
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2023-01-25 17:38:48
Source – reuters
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