Armaments group: Rheinmetall lowers sales forecast after frigate setback
After the cancellation of the F-126 frigate program, the Düsseldorf-based arms company has revised its annual target downwards. Nevertheless, the company remains on a record course.
Düsseldorf - Germany's largest defense contractor, Rheinmetall, has lowered its sales forecast for the year due to the cancellation of the billion-dollar Fregatten project F-126. Instead of projecting up to 14.5 billion euros, Rheinmetall now expects between 13.7 and 14.2 billion euros in revenue. However, the company remains committed to its profit target, projecting an operational margin of 19 percent for the current fiscal year.
The company recently released first-quarter figures showing strong growth in sales and profits, but also a negative cash flow, indicating outflows of funds. The negative result is attributed to delayed payments from key customers, emphasizing the company's heavy reliance on individual clients, primarily Germany. The buildup of stocks also adds to the cash flow burden.
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