Warship builder TKMS ups 2026 outlook, shares near 6-month high

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Aug 12 (Reuters) - German warship manufacturer TKMS on Wednesday raised its sales outlook for the second time in six months, expecting higher demand for surface vessels such as frigates as well as for its sensors and mine-sweeping technology.

TKMS has been one of the main beneficiaries of Europe's push to build up its defences in light of dwindling U.S. support, scoring several landmark deals in recent months, including one for Germany's navy as well as a submarine agreement with Canada.

"Our recent successes confirm our outstanding positioning as a maritime powerhouse – both nationally and internationally," CEO Oliver Burkhard said. "They are a strong sign of confidence in our ability to perform and deliver."

The company, majority-owned by Thyssenkrupp, now expects sales to grow by between 10% and 12% in its financial year ending September 30, up from 2-5% previously and also beating the average 4% estimate in a poll of analysts it provided.

TKMS shares rose as much as 15.7%, hitting their highest level in nearly six months.

"TKMS continues to win large contracts, backlog is set to rise sharply, and margins should expand as the legacy book rolls off," Jens-Peter Rieck of mwb research wrote. "TKMS remains our favourite German defense stock."

Its operating profit margin is now seen at up to 6.5% for the year, higher than the 6.4% poll estimate and comparing with a previous forecast of more than 6%.

Nine-month operating profit rose 13% to €110 million ($127 million), beating the €101 million poll forecast. Its order book slightly shrank to €20.1 billion at the end of June, down from €20.6 billion at the end of the previous quarter.

($1 = 0.8672 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Kirsti Knolle and David Holmes)