German warship maker TKMS warns 2026 profit could fall (updated)

TKMS AG & Co KgaA

08/12/2025 06:35

TKMS carries out pre due diligence on shipyard GNYK, CEO says

CEO expects decision on possible deal in next few weeks

TKMS expects 100-150 million euros in operating profit in 2026

Updates with CEO comments on GNYK takeover talks in paragraphs 1-4

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Dec 8 (Reuters) - German warship builder TKMS TKMS.DE expects to decide in the next few weeks on whether to buy neighbouring shipyard German Naval Yards Kiel (GNYK), its CEO Oliver Burkhard said on Monday, as the group considers expansion to meet rising demand.

TKMS, which was spun off from parent Thyssenkrupp TKAG.DE in October, already bought insolvent shipbuilder MV Werften in 2022, and a purchase of GNYK would further increase its capacity at a time when governments boost defence spending.

Talks with GNYK, which is owned by France-based shipping group CMN Naval, are currently underway, and Burkhard said TKMS was in what he called a "pre-due-diligence" stage to see whether a purchase made sense.

"For us, this would be a good opportunity, but it is not a must. And I believe it is important that we know very quickly whether it is worthwhile to deepen talks," Burkhard told reporters after presenting full-year results.

TKMS GIVES MUTED OUTLOOK

In a sign of how attractive the naval defence sector has become, Rheinmetall RHMG.DE, Europe's largest ammunition maker, in September agreed to buy the warship division of another German shipbuilder, Luerssen Group, for around 1.35 billion euros ($1.57 billion).

Shares in TKMS were flat on Monday after the company offered a cautious earnings outlook for 2026, underscoring its dependence on large individual orders and payment schedules that sometimes stretch over several years.

The company expects adjusted operating profit of 100 million to 150 million euros in the fiscal year through September 2026, compared with 131 million euros generated in 2025 and 143 million euros forecast for next year by analysts in a company-provided poll.

TKMS has been benefiting from a surge in defence spending, driven by shifting U.S. foreign policy that is putting greater pressure on Europe to boost its own defences against Russia, which continues to wage war in Ukraine.

This has helped lift TKMS' order backlog to 18.2 billion euros at the end of September - more than tripling over the past five years.

($1 = 0.8584 euros)

 (Reporting by Christoph Steitz and Tom Kaeckenhoff
Editing by Sumana Nandy, Ludwig Burger, Bernadette Baum and Tomasz Janowski)

 ((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))