BERLIN, May 8 (Xinhua) -- Consolidated operating earnings of German defense contractor Rheinmetall declined by 37 percent year-on-year to 34 million euros (36.8 million U.S. dollars) in the first quarter (Q1) of 2020, the company announced on Friday.
According to Rheinmetall, headquartered in the German city of Duesseldorf, sales in Q1 increased slightly by 1.1 percent to 1.4 billion euros.
"Rheinmetall is fighting against the coronavirus crisis with all of our strength," said Chief Executive Officer (CEO) Armin Papperger.
The company's defense business has remained "robust and resilient under these challenging macroeconomic circumstances," which have helped the company soften the negative impact of the COVID-19 crisis, Papperger added.
The group's Defence division has been "largely unaffected by the coronavirus," according to Rheinmetall. The division has "strongly increased its sales" with the growth of about 18 percent to 740 million euros in Q1 year-on-year.
Operating earnings of Rheinmetall Defence climbed from nine million euros to 29 million euros compared to last year, while order intake "also registered significant growth" with an increase of 30 percent to 731 million euros, according to Rheinmetall.
Rheinmetall's Automotive division, however, "did not escape the downward trend on the global automotive markets and the effects of the coronavirus crisis" as Q1 sales declined by 13.5 percent year-on-year to 618 million euros.
Earnings of Rheinmetall Automotive plummeted by almost 80 percent to 10 million euros, while the operation earnings margin of the sector decreased from 6.9 percent in the previous year to 1.7 percent in Q1 2020.
The annual forecast for Rheinmetall Defence is confirmed, with sales growth of between five percent and seven percent in 2020. The company "does not currently expect the COVID-19 crisis to have any lasting impact on the Defense sector's business performance in the current year."
Rheinmetall did not publish an outlook for its Automotive division in 2020. According to the company, the potential effects of the COVID-19 crisis on end-customer demand, production figures in the automotive industry as well as global supply chains could not be reliably forecast at present. Enditem
