Rheinmetall’s €64B backlog overshadowed by looming frigate contract loss
Rheinmetall, the German defence and automotive group, has reported a record €64 billion order backlog. However, the company faces uncertainty with a multi-billion-euro contract for six Type 126 frigates at risk of being lost to rival TKMS. This potential loss could significantly impact Rheinmetall's future growth.
Rheinmetall's revenue grew by 20% to €7.5 billion in the first nine months of 2025, with operating profit up 18% to €835 million. Despite this strong performance, the company's stock has plummeted due to the uncertainty surrounding the frigate deal. Delays in passing the federal budget have also led to a decrease in contract awards for Rheinmetall in the third quarter.
The frigate deal, worth billions, is a critical factor for Rheinmetall's future. The main parties involved in the dispute are the German Ministry of Defense, the Dutch shipbuilder Damen (the original contractor), and the German shipyard NVL as a potential new contractor. The Bundestag has allocated up to 7.8 billion euros for an alternative platform to the F126, indicating a possible shift away from Damen towards NVL. This suggests NVL may have an advantage in continuation, but the final decision depends on upcoming evaluations and political choices. Investors are closely watching these developments, weighing the strength of Rheinmetall's business model against short-term political frustrations.
Rheinmetall's record order backlog and strong financial performance in the first nine months of 2025 have been overshadowed by the uncertainty surrounding the Type 126 frigate contract. The outcome of this dispute will be crucial in determining the company's future growth trajectory and stock performance.
Read also:
- American teenagers taking up farming roles previously filled by immigrants, a concept revisited from 1965's labor market shift.
- Weekly affairs in the German Federal Parliament (Bundestag)
- Landslide claims seven lives, injures six individuals while they work to restore a water channel in the northern region of Pakistan
- Escalating conflict in Sudan has prompted the United Nations to announce a critical gender crisis, highlighting the disproportionate impact of the ongoing violence on women and girls.
