By Jan Lopatka
PRAGUE (Reuters) – Czech-based defence firm CSG expects a surge in demand as Europe seeks to rearm, predicting on Thursday further double-digit growth after revenue and profits more than doubled last year.
European countries are hastening to boost defence spending and maintain support for Ukraine after U.S. President Donald Trump froze U.S. military aid to Kyiv and raised doubts about Washington’s commitment to European allies.
The firm, owned by 32-year old businessman Michal Strnad, said on Thursday it had an 11 billion euro ($12.23 billion) backlog of mostly large-calibre ammunition orders, as well as orders for armour such as howitzers and armoured vehicles.
Revenue jumped by 131% in 2024, to 4 billion euros, and earnings before interest, tax, depreciation and ammortisation rose 146% to 1.1 billion euros, the company said.
Supplies to Ukraine, for its defence against a Russian invasion, quadrupled last year to 1.7 billion euros, CSG said, making up 42.8% of total revenue. Other European countries accounted for 43.5%.
“We are following the announcements of governments in the EU and NATO on increased defence spending. This is pretty much the key element of growth not only for us, but all defence groups in Europe and the western world,” CSG Chief Financial Officer Zdenek Jurak told reporters.
“The increase in spending in the defence sector will continue and companies will grow. For our group we expect to grow sustainably in the medium term for sure.”
The company has raised capacity to make large-calibre ammunition, including the NATO-standard 155mm artillery shells, to “high hundreds of thousands” per year at its factories across several European countries, including Spain and Slovakia.
Jurak said capacity constraints meant that contracted deliveries were being spread over five-to-six years, versus the pre-war standard of 18 months.
CSG is in the process of completing vertical integration of its ammunition production chain, with the pending takeover of a nitrocellulose plant in Germany, and has formed a joint venture for trinitrotoluene (TNT) and shells production in Greece.
It has also signed a cooperation agreement with Ukraine’s Ukrainska Bronetechnika to start producing artillery ammunition in Ukraine and the Czech Republic, with a 2025 production target of 100,000 pieces, growing to over 300,000 in 2026.
Jurak said the project was being developed but declined to give detail, citing security reasons.
CSG last year completed a long-sought $2.2 billion acquisition of U.S. small-calibre ammunition maker The Kinetic Group, whose results for the month of December are included in the consolidated results.
($1 = 0.8992 euros)
(Reporting by Jan Lopatka; editing by Barbara Lewis)
