RENK Group is one of the world’s leading suppliers of highly efficient drive and control technology. They develop systems that use high forces and torques to drive vehicles, ships and machines. Customers come from defense, energy and industrial sectors. (Photo by Christophe Stache/AFP via Getty Images)
Christoph Stache | Afp | Getty Images
Chief Executive of the German Defense Agency Rank He said the escalating war in the Middle East could boost his business in the region.
“The current crisis in the Middle East, the Iran war, that could lead to overall and that’s really a gut feeling for the overall increasing demand for defense capabilities in the region,” CEO Alexander Sagel said on a call with analysts on Thursday.
A day earlier, the company said it received its first orders … from a “Gulf state” for prototypes for a new infantry fighting vehicle (IFV), which will be developed over the next two to three years. “It’s kind of an indication,” he added.
Gulf states are in the firing line of the war, facing Iranian ballistic missiles that target US bases on their territory, as well as energy facilities, civilian infrastructure and cities.
Renk reported the fourth quarter and full year Earnings before noon on Thursday. Although the gains covered the period before the war in the Middle East, analysts had questions about Iran.
“I think this conflict will further increase defense costs, not only on the air, not only on ammunition, not only on air defense systems, but also on the ground,” Sagel said.
Renk specializes in military drivetrain technology, including IFVs, and many large defense organizations count on Renk as one of their suppliers.
Renk shares are up 46% over the past 12 months.
The German mid-cap defense firm reported full-year revenue that grew 19.8% year-on-year, with adjusted earnings before interest and tax expanding 21.7%.
Order intake increased 9% over the year and the order backlog came in at a record 6.68 billion euros compared to 4.96 billion euros in 2024.
However, this year’s guidance came in below consensus and shares of the Frankfurt-listed company were down more than 4% in afternoon trading. The company sees 2026 revenue of at least 1.5 billion euros, about 3% below consensus at the low end.
Renk shares have nearly tripled in price since their initial public offering in February 2024.
Europe’s defense stocks rallied amid heightened geopolitical tensions and the war in Ukraine, prompting European governments to spend more on defense. A great friend Rheinmetall It will report earnings next week.
Renk’s largest and most important unit, Vehicle Mobility Solutions, drove the growth to 2025, with profitability up nearly 28%.
Its Marine and Industry unit posted double-digit growth on both the top and bottom lines, and CEO Sagel sees an opportunity for the naval unit to benefit from US President Donald Trump’s push for an expanded US defense budget, noting a historically lower number of US ships.
“If you look at the geopolitics, especially in Asia, or when you look at the carrier strike groups now in the Middle East, they need to build and ramp up battleships, destroyers and whatever,” Sagel said.
(Tags to be translated)Rhinemetal AG
