Germany's largest defence contractor Rheinmetall, which intends to significantly accelerate profit growth this year, is about to ramp up its production of artillery shells to 10 times the previously produced amount.
Before the Ukraine war, around 70,000 shell were sold per year, but demand has now increased massively, Rheinmetall CEO Armin Papperger said on Thursday in Dusseldorf.
With a view to the intended production capacities at the end of 2024, Papperger added: "We are talking about around 700,000 shells." With a a new production in Germany and two planned plants in Ukraine and Lithuania, this figure is expected to rise to 1.1 million by 2027.
Rheinmetall says it is the largest manufacturer of artillery ammunition in the Western world; its competitors include the Norwegian company Nammo.
Ukraine currently urgently needs artillery ammunition to be able to defend itself in the full-scale war which Russia started more than two years ago.
When asked about how many shells the supplier has earmarked for Ukraine, Papperger said: "Several hundred thousand shots from Rheinmetall are going to Ukraine." He did not go into further detail.
Rheinmetall saw profits increase in the full year 2023 compared to 2022, and the company said on Thursday intends to significantly accelerate that growth this year.
Rheinmetall AG reported that its fiscal 2023 earnings from continuing operations increased to €630 million ($689 million) from €534 million in the previous year.
Earnings per share from continuing operations were €13.02 compared to €10.80.
Consolidated operating result, or EBIT before special items, increased by 19% to €918 million.
Basic earnings per share pre PPA effects from continuing operations were €14.65 compared to €10.96.
In fiscal 2023, consolidated sales were €7.18 billion, up 12% from the previous year.
Taking into account exchange rate and M&A effects, sales growth was 11.9%.
Adjusted for these effects, sales growth was 10.6%.
The Rheinmetall Group projects annual sales to rise to a level of around €10 billion in fiscal 2024.
The company expects an improvement in operating result and a group operating margin of 14% to 15%.
A dividend payment for fiscal 2023 of €5.70 per share will be proposed to the annual general meeting on May 14, 2024.
Rheinmetall sells tanks, artillery, anti-aircraft defence, military trucks and ammunition. The group employs around 23,000 people.
