Czechoslovak Group's net profit almost halved to CZK 5 billion last year

Industrial-technology group Czechoslovak Group (CSG) increased its net profit by 49 percent year-on-year to EUR 210 million (roughly CZK 5 billion) last year. Revenues rose 71 percent to 1.73 billion euros (nearly 42 billion CZK). The defence industry accounted for more than 70 per cent of the group's sales. The company, owned by businessman Michal Strnad announced today. The arms makers' performance amid the ongoing war in Ukraine is boosting states' investment in defence.

"CSG's strong growth in 2023 was mainly driven by two strategic sectors in which we have long been active, namely the production of large-calibre ammunition and the production of military ground equipment," said Zdenek Jurák, a member of the CSG board of directors and group CFO. According to him, the growth is due to growing demand, investments in production expansion and increasing labour productivity. Given the growing importance of the defence industry and the strengthening of defence budgets around the world, the company sees potential for further revenue growth in the coming years, he added.

Jurák said the group maintained a strong capital position last year while reducing debt. The group issued €181.3 million worth of bonds last year.

CSG's EBITDA operating profit more than doubled year-on-year last year to EUR439m (more than CZK10.5bn). The group supplied its products and services to more than 55 countries last year, with the majority of CSG's production going to European countries excluding Ukraine. "Two-thirds of CSG's sales were generated in NATO member states, with the remaining third in the rest of the world (mainly Ukraine, Indonesia, Vietnam and Morocco)," the company said.

More than 60 per cent of sales are from CSG's Defence division, which includes manufacturers of land-based military equipment and large-calibre munitions. A fifth of sales are from CSG's small calibre ammunition division, CSG Ammo+. "In addition to the CSG Defence division, defence contracts were executed in other divisions: for the CSG Aerospace division, they accounted for 63 per cent of its sales, for the CSG Ammo+ division 13 per cent and for the CSG Business Projects division 30 per cent of its sales," the company said.

The CSG Aerospace division covers the aerospace industry, while CSG Business Projects covers other companies outside the group's core businesses. Another division is CSG Mobility, which includes automotive and rail manufacturing. At the end of last year, the group employed more than 10,000 people at 37 manufacturing sites.

CSG's main production sites are in the Czech Republic, Slovakia, Spain, Italy, India, the UK and the USA. The group includes, for example, the Czech car manufacturer Tatra Trucks, the world's leading manufacturer of small-calibre ammunition Fiocchi and the Czech radar manufacturer Eldis.

Source: Czechoslovak Group and CTK