Rheinmetall lowered its sales outlook after Germany cancelled the F126 frigate project, expecting a €300mn hit and revising full‑year revenue to €13.7bn–€14.2bn from a previous €14bn–€14.5bn.

The €15bn F126 programme was to contribute less than 3 % of the targeted €50bn by 2030. Despite the setback, first‑half sales rose 39 % to over €5bn, the order book swelled to €80bn, and the operating margin improved to 15 % from 12 %. Shares rose 1.6 % in early trading on Thursday.

CEO Armin Papperger said the naval division is “looking to the future”, focusing on current maritime orders and securing new international contracts. German defence minister Boris Pistorius opted for up to eight frigates from TKMS, citing cheaper and faster delivery. The cancellation raises questions about Papperger’s strategy after Rheinmetall’s €1.5bn acquisition of Naval Vessels Lürssen.

The decision follows Damen’s cost overruns and delays on the F126, prompting Berlin to scrap the programme. Rheinmetall’s shares had fallen about a quarter this year before Thursday’s modest gain. The company continues to analyse the medium‑ and long‑term implications of the loss, while analysts note the order backlog remains robust.