Defense contractor TKMS reported first-half revenue and earnings slightly ahead of expectations, bolstered by surging demand for military hardware. Adjusted operating profit (EBIT) rose by approximately 14 percent to 60 million euros, the company announced on Monday. Revenue climbed ten percent to 1.17 billion euros. These figures marginally beat analyst estimates, which had averaged an operating profit of 59 million euros on revenue of 1.1 billion euros. Growth was primarily driven by the submarine and sonar technology divisions. Driven by new orders, order intake reached 3.4 billion euros, pushing the total order backlog to a new record high of 20.6 billion euros at the end of March.

The surge in demand for weaponry following the Russian invasion of Ukraine and the U.S. administration's shifting stance on NATO has provided European defense firms with a wave of new contracts. German industry leader Rheinmetall has similarly been posting consecutive record results. Both TKMS and Rheinmetall are seeking to acquire the German Naval Yards Kiel (GNYK) shipyard as part of their expansion strategies. Both groups have submitted non-binding offers. TKMS stated that discussions with GNYK's owners 'continue to be conducted with an open outcome'.

The group remains on track to meet its annual targets for the 2025/26 fiscal year, aiming for an adjusted EBIT margin of over six percent. In the first half, the margin stood at 5.1 percent. Revenue is projected to grow by two to five percent compared to the previous year.

(Report by Matthias Inverardi. Edited by Ralf Bode. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)