German Shipbuilder TKMS Raises Outlook as Defense Boom Builds

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Or sign-in if you have an account.(Bloomberg) — Germany’s biggest naval shipbuilder raised its full-year outlook again as Europe’s rearmament boom drives surging demand for warships, submarines and underwater electronics.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountTKMS AG & Co., which was spun off from Thyssenkrupp AG last year, said Wednesday that it expects sales to rise 10% to 12% in the year through September, up from 2% to 5%, with its adjusted operating margin reaching as much as 6.5%. It’s the second guidance upgrade this fiscal year as surging military budgets turn into orders for scarce naval hardware.The outlook underscores the rapid transformation of TKMS since it was spun off from Thyssenkrupp, the German industrial conglomerate that is breaking itself up into more independent businesses. Thyssenkrupp retained a 51% stake, while the separation gave the shipbuilder greater independence to pursue growth as defense spending jumps.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAt the heart of that growth are TKMS’s non-nuclear submarines and MEKO warships, a family of modular frigates and corvettes. Its broader portfolio includes torpedoes, sonar, and uncrewed underwater systems — equipment that’s increasingly in demand as European governments rebuild their naval forces.The boom may only be beginning. Years of post-Cold War under investment have left fleets depleted and shipyards stretched, just as governments race to rebuild military capacity in response to Russia’s war in Ukraine and mounting pressure to shoulder more of their own defense.TKMS said earnings are benefiting from the ramp-up of higher-margin new-build projects like the Type 212CD submarines it’s building for Germany and Norway and Type 218SG submarines for Singapore. Adjusted earnings before interest and taxes rose to €110 million ($127 million) in the nine months through June 30, up from €98 million a year earlier, helped by a fourfold increase at its submarine business.Revenue and earnings are set to grow further after TKMS was selected as preferred supplier for Canada’s new submarine fleet and secured a German frigate order. The company said it is working to conclude negotiations with Canada, while the frigate order is expected to enter its backlog in the final quarter. This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.