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Rheinmetall Q1 Earnings Down, Sales Rise; Sees Significantly Lower FY20 Results

German defense contractor Rheinmetall AG (RNMBF.PK) reported Friday that its first-quarter consolidated operating earnings amounted to 34 million euros, down from last year's 54 million euros, hurt by weak results in the Automotive sector due to coronavirus crisis.

The operating earnings margin decreased to 2.5 percent from 4.0 percent in the previous year.

Rheinmetall's consolidated sales, however, grew 1.1 percent to 1.358 billion euros from prior year's 1.342 billion euros.

Despite the coronavirus pandemic, Defence sector sales grew about 18 percent to 740 million euros, but Automotive sales fell around 14 percent to 618 million euros.

Order backlog as of March 31 increased 13 percent to 10.3 billion euros.

Looking ahead, the company confirmed its 2020 forecast for the expected business performance of the Defence sector. Meanwhile, a forecast for the Automotive sector is currently impossible due to persistent uncertainties.

Rheinmetall anticipates Defence sales growth of between 5 percent and 7 percent for 2020 as a whole. The Defence sector's operating margin is expected to come to between 9 percent and 10 percent.

Rheinmetall expects that sales and operating earnings in the Automotive sector and the Group will be significantly lower than in previous forecasts, which did not yet account for the effects of the coronavirus crisis.

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