Profitability: Rheinmetall boosts net income by 50 percent
;Following the quantum leap of 1997, the Rheinmetall Group in fiscal 1998 fully matched expectations with an income leap again outperforming the good year-earlier figure. The 1998 results also include nonrecurring gains. Following the high level of DM 273 million in 1997, the operating result again increased, to DM 340 million. Net income showed another gain by 50 percent to DM 273 million. Despite the capital increase in June 1998 and hence the larger volume of shares, the DVFA earnings per share climbed to DM 3.32 (up from DM 3.27). In its core businesses represented by Electronics (Rheinmetall Elektronik AG), Defence Electronics (STN ATLAS Elektronik GmbH) and Defence Technology (Rheinmetall Industrie AG)-both sectors in future under Defence (Rheinmetall DeTec AG-as well as Engineering, including the Paper and Packaging Technology divisions of Jagenberg, and Automotive (Kolbenschmidt Pierburg AG) as a supplier of systems and modules for every aspect of the engine, Rheinmetall has successfully addressed the challenges of the market. All corporate sectors turned in clear profits. At DM 31 million, the net income at Electronics was definitely up over the previous year. At DM 32 million, Defence Electronics succeeded in achieving the budgeted net income. By adapting its cost structures to the still lower level of the national defense budget, Defence Technology again managed to render a stable contribution toward the profit. Net income amounted to DM 73 million, including one-time gains from the sale of a number of housing units. In all, Defence contributed DM 105 million to the overall result. Despite the troubled paper industry market, Engineering again earned a profit, DM 26 million. Included is the gain from selling stakes in a property company. Automotive at DM 106 million re-improved on the year-earlier profit. The Pierburg and Plain Bearings divisions were especially successful.