The German warship builder Thyssenkrupp Marine Systems, or TKMS, said its order backlog hit a record 20.6 billion euros ($24.2 billion) at the end of March, lifted by European moves to curb reliance on United States-produced military technology.

The company said the increased demand was a direct response to a changing geopolitical landscape, where European nations are attempting to increase their military autonomy.

The Russia-Ukraine conflict and military conflicts in the Middle East involving Israel, the US, and Iran have led to a permanent increase in global defense spending, the company said in its quarterly report.

TKMS, which is majority owned by German engineering group Thyssenkrupp AG, has been riding the shift toward defense since its October stock market listing, Reuters reported.

According to analysis from German equity researcher MWB, TKMS is uniquely positioned to support the NATO military alliance and allied navies because it is a "naval pure play", meaning a company that focuses almost entirely on naval defense, which includes designing and building warships, submarines, and related systems.

The company said its submarine and sonar technology divisions lifted first-half sales and profits above expectations.

For the six months to March, adjusted operating profit increased 13.2 percent to 60 million euros, while revenue rose 10.2 percent to 1.17 billion euros. A company poll of analysts had predicted 59 million in operating profit and 1.1 billion euros in sales. Year to date, the company's shares are up nearly 20 percent.

Germany's 100-billion-euro special fund for defense investment, which was established in 2022 to modernize German armed forces after the start of the Russia-Ukraine conflict, has significantly boosted naval modernization.

The special fund was initiated by former chancellor Olaf Scholz and is separate from the regular federal budget, enabling the government to circumvent Germany's constitutional "debt brake".

The surge in domestic demand for submarines, ships, and sensors has consequently benefited TKMS with increased orders.

In October, the European Commission presented its white paper Roadmap 2030 that proposed several key initiatives to boost European defense readiness and investment.

It stated the bloc's intention to move from US dependence to self-sufficiency, seeking to build its own defense industrial base and to coordinate procurement to create a more integrated European defense market.

The European Commission said last month it will put 1.07 billion euros into 57 new defense projects under the 2025 European Defense Fund initiative.

The projects span a range of critical sectors, including AI, cyber defense, drones, and counterdrone systems, which are fields Brussels has said are key to keeping Europe at the front of defense technology.