German car and arms maker Rheinmetall said that it significantly increased its profitability in the third quarter of the current fiscal year, exceeding current market expectations. Operating profit for the reporting period is expected to reach €191 million ($201 million) compared to market expectation of €165.4 million.
The preliminary sales figures of €1.758 billion for the third quarter were in line with market expectations. All figures shown in the consensus for the third quarter include for the first time the sales and earnings contribution of the Rheinmetall Expal Munitions S.A.U. Consolidated with effect from August 1, 2023. The significantly higher than expected operating profit is mainly due to strong market dynamics in the security technology business - especially in the Weapon and Ammunition division - which led to a favourable product and margin mix in the reporting period. Positive leverage effects as a result of higher production volumes were the main supporting factors.
The company confirmed the organic sales and earnings forecast for full-year 2023 with consolidated sales in a range of €7.4 billion to €7.6 billion (excluding acquisitions) and an operating profit margin of around 12%. The separately communicated sales forecast for Rheinmetall Expal Munitions S.A.U. will be slightly above €150 million to €190 million. The operating margin of Rheinmetall Expal Munitions S.A.U. is now expected at above 25%.
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