Profits for Slovak arms companies quadrupled since Russia’s war began

Profits for Slovak weapons makers have quadrupled since the Russia-Ukraine all-out war began in February 2022.

The profits of Slovakia’s key weapons production companies quadrupled last year compared to the previous year, with corporations stating that the spectacular results are attributable to the Russia-Ukraine war and military supplies to Ukraine.

Slovak weapons manufacturers increased profitability by 4 times

According to an analysis of the profitability of Slovakia’s 17 essential domestic weapons manufacturers, sales increased by 51% in 2022 vs 2021, rising from €262 to €396 million, the Slovak media Dennik E reported.

Profits for these companies increased even more dramatically, with cumulative values quadrupling from €11 million to €49 million. This increase indicates that weapons production was substantially more profitable than in previous years.

“The Slovak defence industry’s products have good quality, and their competitiveness on the international market is constantly increasing, even with the contribution and support of the Slovak Defence Ministry,” said Marián Majer, state secretary of the department.

Ukraine deliveries’ effect on arms companies’ profit increase

Several weaponry businesses indicate in their yearly reports that their outstanding accomplishments were achieved due to increased interest in weapons following Russia’s invasion of Ukraine.

Because of the increased demand for ammunition in Ukraine, ammunition manufacturers such as the one in Nováky have thrived. The same can be stated for the Dubnica nad Váhom-based Kontrukta-Defence state armoury, which oversees the manufacture of Slovak Zuzana 2 self-propelled howitzers provided to Ukraine. It is also the primary supplier of 88 Patria vehicles for the Slovak army.

Pro-Russian Smer’s victory can jeopardise Slovak Defence Industry.

EU officials said they were impressed by the capability of the Slovak weapons manufacturers to double or triple ammunition production.

“We are not talking only about 155 mm ammunition, but also about other products, which will be necessary for the context of a strong increase of the defence spending of the Member States”, the EU Internal Market Commissioner Thierry Breton said.

However, according to analysts, the impending September legislative elections are the greatest risk for the Slovak Defense Industry.

If the pro-Russian Smer party, now leading in the polls, wins the election and assumes control of the Defence Ministry, the new government may replace the management of state-owned enterprises and, eventually, stop all collaboration with Ukraine.

Ammunition production contracts at stake

This might shatter Slovakia’s defence industry, resulting in the loss of arm manufacturing contracts. It may also jeopardise Slovakia’s ability to participate in munitions production for Ukraine and EU states’ stockpiles through the EU budget.

The EU members agreed in March this year on a two-billion-euro plan to supply ammunition from their stockpiles and put joint orders for shell production. The goal was to provide Ukraine with one million rounds of ammunition within a year.

On March 20, the European Union Council approved a plan to supply Ukraine with one million artillery ammunition over 12 months. This ammunition will be manufactured in EU countries by arms manufacturers.