The electronics and machinery group said first-half sales climbed 35 per cent to 3.6 billion marks ($2.11 billion), and predicted net profit for the full year would climb above the 180 million marks it reported in 1997.

"The profit situation will improve further. The goal is 200million plus," it said in a statement.

Pre-tax profit in the first six months of 1998 totalled 10.2 million marks, up from 2.1 million in the year-ago period. Incoming orders in the period climbed 43.7 per cent to 4.3 billion marks.

It forecast a strong rise in second half pre-tax profit, noting that its electronics, defence technology and machinery divisions book most of their sales and profit later in the year. Those units had negative results in the first-half.

"The Rheinmetall group will have worldwide group sales of 8.1 billion marks in 1998. That is agrowth of 23 per cent," the company said.

It also predicted incoming orders for the full year would increase about 18 per cent to 8.5 billion marks.

The company said the Russian financial crisis would have little impact on its results since Russia accounts for less than two tenths of group sales.