Shares in Rheinmetall rise 7pc as defence orders surge

BERLIN: Shares in Rheinmetall climbed on Friday after the German defence contractor and automotive parts maker reported forecast-beating operating profit and said orders at its defence division almost doubled.

Global defence spending is on the rise, driven by the United States, which is also pressing European states to spend more to keep ahead of Chinese and Russian advances.

"The defence sector's business performance, especially the order intake, is increasingly characterised by the significantly increased demand in the military sector and by Rheinmetall's successful positioning in major markets around the globe," Rheinmetall said.

Shares in the Duesseldorf-based company, which makes military vehicles such as the Boxer armoured fighting vehicle, were up 7.4 percent by 1035 GMT, one of the top gainers in the Stoxx 600 index of Europe's top companies.

Analysts at Bankhaus Lampe Bankhaus Lampe said there were "many positive surprises" in the fourth quarter, with figures much better than their forecasts and consensus expectations.

Operating earnings of its defence unit reached 254 million euros ($289 million) in 2018, up 46 percent from a year before, it added.

For the whole group, operating profit was up 23 percent at 492 million euros.