Rheinmetall Faces €300m Revenue Hit After German F126 Frigate Cancelation, New €6.6bn TKMS Order Announced

Germany's defence ministry, led by Minister Boris Pistorius, cancelled the F126 frigate programme after €2.3 billion had already been spent. The contract, originally slated for Dutch shipyard Damen, was terminated and the project was not transferred to Rheinmetall despite the company's interest in taking over the work.

Rheinmetall said the loss could shave up to €300 million from its 2026 revenue and reduce quarterly order intake by roughly €20 billion. The company’s 20‑billion‑euro target for second‑quarter order intake was abandoned in favour of a lower double‑digit‑billion estimate. Shares fell sharply after the announcement, trading around €1,090.

To replace the scrapped vessels, the German government has drafted a deal for four MEKO A‑200 frigates from Thyssenkrupp Marine Systems (TKMS) at an estimated €6.63 billion, with an option for four more worth about €5.3 billion, potentially bringing the total to €12 billion.

Analysts reacted with mixed views: JPMorgan cut its price target for Rheinmetall to €1,350 and kept a neutral rating, while Barclays maintained a more optimistic outlook. Rheinmetall said it would detail the full financial impact when it reports its second‑quarter results on 6 August.