(MENAFN) German arms manufacturer Rheinmetall has posted a sharp increase in profits and sales for the first nine months of 2025, driven by continued demand for weapons and ammunition amid the conflict in Ukraine and rising defense budgets across Europe.

According to financial results released on Thursday, the Düsseldorf-based company’s sales rose 20% to €7.5 billion ($8.7 billion), while operating profit climbed 18% to €835 million. Its order backlog reached a record €64 billion, reflecting growing military procurement among EU member states.

Rheinmetall, which supplies Ukraine with a range of hardware including Leopard tanks, armored vehicles, artillery shells, and ammunition, said it is expanding production with 13 new or upgraded sites across Europe. These include an operational facility in Lithuania and planned plants in Latvia and Bulgaria. The company identified Ukraine, the EU, and Germany as its primary markets.

“We are becoming a global defense champion,” said Rheinmetall CEO Armin Papperger, highlighting the company’s role in strengthening Europe’s military-industrial base.

Germany has emerged as Ukraine’s second-largest arms supplier after the United States. Berlin has loosened its fiscal rules to permit sustained defense spending beyond the initial €100 billion special fund created after the escalation of the conflict in 2022. Chancellor Friedrich Merz has repeatedly stated his ambition to build “Europe’s strongest army.”

Moscow has condemned the surge in Western weapons deliveries, calling it “reckless militarization.” Russian Foreign Minister Sergey Lavrov accused Merz of attempting to turn Germany into “the main military machine of Europe” and said Berlin’s actions demonstrate its “direct involvement” in what Moscow calls a Western proxy war against Russia. Lavrov also warned that the broader EU was drifting toward what he described as a “Fourth Reich.”

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