Renk order intake jumps by a third, backlog reaches record high

Nov 5 (Reuters) - German defence supplier Renk R3NK.DE on Thursday reported a sharp rise in orders in the first nine months of the year, driven by demand for military vehicle transmissions, as European countries step up efforts to rebuild their armed forces.

Order intake rose by a third to €1.66 billion ($1.87 billion), pushing the order backlog to a record €7.6 billion. Revenue increased 5.8% to €982 million and adjusted operating profit rose 12.7% to €158.8 million.

The increase reflects strong demand for equipment such as the Leopard 2 tank, for which Renk is a key transmission supplier.

In the third quarter, the company secured a contract worth around €130 million from KNDS Germany for transmissions for Leopard 2 tanks and related vehicles, with deliveries scheduled from 2029 to 2032.

Third-quarter order intake alone increased 44.6% year-on-year to €469 million, exceeding revenue of €345 million.

The backlog, however, is not all made up of firm orders. Of the €7.6 billion backlog, €2.9 billion consisted of fixed orders, while €3.6 billion was classified as soft orders based on estimated future volumes for sole-source projects and successor programmes. A further €1.1 billion came from framework agreements.

The ability to convert that demand into deliveries will be crucial for Renk. Revenue growth continued to lag order growth as sales followed customer delivery schedules.