KIEL (dpa-AFX) - Naval shipbuilder TKMS is expecting more growth this year than previously projected. The company, newly listed on the MDax, announced on Wednesday that revenue in the 2025/26 fiscal year (ending in September) is now forecast to rise by 2 to 5 percent. Previously, guidance had been for a range between minus 1 and plus 2 percent. Adjusted earnings before interest and taxes (Ebit) are still expected to come in between 100 and 150 million euros, with the corresponding margin anticipated to exceed 6 percent. Despite the upgraded outlook, shares fell.
By late morning, the stock had slipped 1.4 percent to €93.45. While this puts the price below the record high of €107, reached on the very first day of trading in October, it remains well above the initial issue price of €60. At times, TKMS has even been valued higher on the stock market than its parent company, Thyssenkrupp.
For Jens-Peter Rieck of analysis firm MWB Research, the negative share reaction after a "solid" first quarter is surprising, since TKMS's report contained no negative news. He sees the current price level as an attractive entry point. Bernstein analyst Adrien Rabier, meanwhile, considers the stock to be highly valued. Although he also praised the overall figures, he described the margin in the crucial submarine division as concerning. However, he noted that TKMS is on track for improvement in the second quarter.
In the first fiscal quarter (to the end of December), TKMS revenue fell by 1 percent year-on-year to €545 million. Adjusted Ebit was flat at €26 million, with the corresponding margin rising from 4.7 to 4.8 percent. Net profit dropped by 85 percent to €4 million, mainly due to higher taxes and lower financial results.
Order intake plummeted by 83 percent to €904 million, as the previous year's quarter had been marked by record bookings, particularly for submarines, amid a defense boom. Currently, the largest torpedo order in the company's history for the German Navy counts among the most significant new contracts. The latest order from Norway, for two additional submarines, is not yet included in the order intake, as it was signed only after the reporting cutoff, according to the company.
"In light of current geopolitical developments, our customers continue to have a strong demand for advanced maritime capabilities," said CEO Oliver Burkhard in a statement from Kiel. Overall, TKMS is sitting on an order backlog of around €18.7 billion—the highest in its history.
Burkhard confirmed the shipbuilder's targets for the coming years. Revenue is expected to grow by an average of around 10 percent annually in the medium term, with increasing growth momentum anticipated. The adjusted earnings margin is meanwhile set to climb above 7 percent.
TKMS is a systems supplier for submarines and naval vessels as well as maritime electronics and security technology. The company employs over 9,100 staff, including at three shipyards in Kiel, Wismar, and Brazil. Thyssenkrupp spun off TKMS and listed it on the stock exchange at the end of October. The industrial group retains a majority stake, holding just over 50 percent of shares. Since the end of December, TKMS has been listed on the MDax for mid-sized companies./niw/tav/mis
