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    German Arms Manufacturer Downgrades Annual Forecast Amid EU Sanctions on Russia

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    German military technology group and automotive parts supplier Rheinmetall has been forced to downgrade its annual forecast for fiscal 2014 after the cancellation of an export permit for Russia amid EU sanctions against Moscow, an official statement from the company said Thursday.

    MOSCOW, August 7 (RIA Novosti) - German military technology group and automotive parts supplier Rheinmetall has been forced to downgrade its annual forecast for fiscal 2014 after the cancellation of an export permit for Russia amid EU sanctions against Moscow, an official statement from the company said Thursday.

    “Due to the fact that the export license for the Mulino combat training center in Russia has been withdrawn owing to changes in the political environment, it is no longer possible to fulfill the respective contract from today’s perspective. Rheinmetall already assumes that this will lead to financial burdens in the current fiscal year,” the statement published on the company’s website said.

    According to the forecast, the defense sector’s operating result has been adjusted from 85 million to 95 million euros ($114 million to $127 million) to 65 million to 75 million euros ($87 million to $100 million).

    “Rheinmetall is working hard to ensure that these burdens are kept as low as possible including the utilization of all available legal options,” the statement said.

    Earlier this week, the German government canceled a 100 million euro ($134 million) joint project between Russia’s Defense Ministry and Rheinmetall for the building of the Mulino combat training facility in Russia’s Western Military District.

    The deal was canceled in light of the sanctions imposed by the European Union against Russia.

    On Tuesday, Russia’s Defense Ministry said it was preparing documents in order to sue Rheinmetall over the cancellation of the contract.

    The European Union and the United States have imposed several rounds of sanctions against Russian companies, banks, politicians, as well as the financial, energy and defense sectors of the Russian economy, accusing Moscow of meddling in Ukraine’s internal affairs.

    Moscow has repeatedly called the measures counterproductive and denied any involvement in the Ukrainian conflict.

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    European Union, sanctions, Rheinmetall
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