German tank supplier Renk hit by delays, export curbs

By Maria Rugamer

March 5 (Reuters) - Renk Group R3NK.DE, a key supplier of transmissions for Leopard 2 tanks, on Thursday reported full-year revenue in line with analysts' estimates, saying it had been hampered by order delays and export restrictions.

Renk has emerged as a prime beneficiary of Germany's rearmament and broader NATO efforts to increase defence spending towards 2% of GDP.

The company's defence business grew revenue by 24% in 2025 to 1.02 billion euros ($1.19 billion), accounting for 74% of its total revenue.

But its shares, which have risen by more than 50% in the past year, were down 6% at 1240GMT.

ORDER BOTTLENECKS EMERGE AS PRESSURE POINTS

Order delays weighed after several naval and R&D programmes slid into 2026, though Chief Executive Alexander Sagel told reporters that "these programmes are not lost; they are shifted into next year," citing customers delaying orders.

Berenberg analysts flagged in a note that the fourth quarter order intake was driven by the shift of about 200 million euros of defence orders into 2026, noting its 2025 order intake would have reached about 1.37 billion euros without the delay.

Renk's growth has been fuelled by long-term contracts to both equip new vehicles and provide higher-margin servicing for existing fleets.

ISRAEL EXPORT EMBARGO HIT

Fourth-quarter business was hit when "we could not deliver the quantities to Israel because we had this export embargo," Sagel told analysts.

The German government suspended exports of weaponry that could be used in the Gaza Strip in response to Israel's operations there.

Sagel first flagged revenue risks from German export restrictions in August last year, saying that Israel represents between 2% and 3% of Renk's business portfolio.

He told analysts on Thursday that Renk expects "in the next four to five weeks a more clear visibility" on the restrictions.

"We are in very close discussions with the German government," he said.

The company proposed a dividend of 0.58 euros per share for the 2025 fiscal year, a 38% increase from the prior year.

($1 = 0.8604 euros)