BELFAST — Germany’s decision to cancel its planned F126 frigate has forced Rheinmetall to reduce an annual naval business sales forecast by €300 million ($346 million), the company said today.
The acknowledgement came in a semi-annual financial report that said despite the expected high-dollar loss on the program, fiscal year 2026 sales across the company as a whole are expected to reach between €13.7 billion to €14.2 billion. Those figures far exceed the firm’s 2025 annual sales haul, valued at 9.9 billion.
“The security policy situation with significantly increased defence budgets in numerous countries ensures demand in the military business. The promising market situation and the persistently strong order book remain unchanged,” the company said. “However, the business development previously anticipated for the current 2026 fiscal year is being affected by the cancellation of the F126 frigate programme.”
Berlin had planned to buy six F126 frigates, originally contracted to Dutch shipbuilder Damen Schelde Naval Shipbuilding (DSNS). Issues with the project, however, prompted Germany to consider shifting it to German shipbuilder Naval Vessels Lürssen (NVL). Rheinmetall acquired NVL in March, with the potential to take on the F126 program.
But after a government review found transferring the program could cost in excess of €18 billion, in June Germany formally scrapped the six-ship project and moved immediately to a new plan to acquire eight ThyssenKrupp Marine Systems (TKMS)-produced MEKO frigates to conduct anti-submarine warfare and satisfy NATO requirements, as Breaking Defense previously reported. The procurement is dependent on approval by the approval by Germany’s parliamentary Budget Committee.
Following this move and over the course of the last four months, Rheinmetall’s naval systems division still pulled in sales of €334 million, according to the half-year results statement.
New build ship programs largely accounted for the sales return, including construction of intelligence vessels (FDB424), Braunschweig-class corvettes (K130), replenishment oilers (MBV707) and the Bulgarian multi-purpose modular patrol vessel programme (MMPV90).
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In keeping with plans to expand maritime business, the Dusseldorf-based company also unveiled a new guided-missile frigate, dubbed the GMF 140, earlier this week.
Rheinmetall said the ship could be available to an unnamed North American customer, with a mission set including air and ballistic missile defense, anti-submarine warfare, and long-range strikes.
Elsewhere, the company said vehicle system sales reached a half-year figure of €2.43 billion, a jump of 28 percent compared with 2025. The spike, noted the firm, is a result of Rheinmetall delivering on German tactical vehicle programs, alongside other business including wheeled armored vehicles for Berlin and European customers.
Weapon systems, ammunition and protection systems drew sales of €1.76 billion over the latest reporting period, a 33 percent increase over the first half of 2025. Key “drivers” of the sales total were an ammunition package for Hungary and supplies of artillery and medium-caliber ammunition for Ukraine.
Air defense sales also registered a 62 percent year-on-year increase, returning a total of €478 million and broadly based on production of Skynex and Skyranger air defense systems for European buyers.