Rheinmetall shares have soared 13-fold since before Russia's full-scale invasion of Ukraine in February 2022 as defence spending has surged across Europe

Frankfurt (Germany) (AFP) - German armsmaker Rheinmetall on Wednesday reported record profit as the tank gun maker cashes in on Europe’s rearmament drive.

Second-quarter core profit roughly doubled on the same time last year to reach 562 million euros ($639.5 million), Rheinmetall said, beating analyst expectations by about 20 percent.

Revenue at 3.3 billion euros was up almost 70 precent, it added, with growth broad-based across the company.

“All segments contributed to this year-on-year improvement,” Rheinmetall said. “Operating metrics have thus been significantly exceeded.”

Rheinmetall shares were up almost nine percent at 1310 GMT, before paring gains.

Rheinmetall shares have soared 13-fold since before Russia’s full-scale invasion of Ukraine in February 2022 as defence spending surges across Europe.

Germany’s defence budget is planned to rise 33 percent by next year to almost 110 billion euros as Berlin rearms to face the threat from Moscow and compensate for wavering American commitment to European security.

The munition maker’s shares have nevertheless fallen about 40 percent since a peak last October.

The plunge is partly down to investor jitters that the boom in defence spending might prove less durable than thought as well as fears that the 137-year-old company might not be best placed to make cutting-edge equipment including drones and missiles.

Rheinmetall has expanded beyond its traditional expertise in recent years as it has grown deeper pockets.

In March, it completed the acquisition of naval shipyard NVL, partly in the expectation that it would secure a German order for six naval frigates that later fell through.

In April, the firm said it would start making cruise missiles for the first time as part of a joint venture with Dutch defence firm Destinus.

Rheinemtall presents its full results on August 6.