German submarine maker TKMS has reported a record $22 billion order backlog and subsequently raised its sales outlook for 2026. Sales are now projected to increase by 2% to 5% in 2026, a significant jump from the previous forecast range of negative 1% to positive 2%. This revised outlook surpasses the average forecast of 2.9% in an LSEG poll of banks and brokerages. The surge in demand for warships, amid heightened geopolitical tensions, is cited as the primary driver for these strong figures.
Key to this success is the company's recent win of a substantial Canadian contract for the construction of up to 12 submarines, a deal estimated to exceed $10 billion. TKMS CEO Oliver Burkhard expressed confidence in securing this deal against South Korean rival Hanwha Ocean, highlighting the company's comprehensive industrial package. While specific details of the Canadian contract were not publicly confirmed by TKMS, reports indicated their victory in the bidding process. The company is also building six submarines each for Germany and Norway.
Financially, TKMS's order backlog reached a record $20.6 billion for the six months ending March. Turnover was up 10% to $1.17 billion, and adjusted operating profits rose 14% to $60 million. However, net profit fell by 41% to $27 million, attributed to investments in expansion, including research and development and marketing efforts. Total new orders amounted to $3.4 billion, slightly below the previous year's level for the same period. The company is exploring international partnerships to meet the growing order volume.
