Colt CZ Group's revenues fell year-on-year in the first quarter, it sold fewer weapons

Colt CZ Group's revenues fell year-on-year in the first quarter, it sold fewer weapons

Colt CZ Group's revenue decreased year-on-year in the first quarter, it sold less weapons

Weapons production in the Colt CZ Group SE holding.

Prague/Uherský Brod (Hungary) – Holding Colt CZ Group SE (Colt CZ) reported revenues of three billion crowns for the first quarter of this year. They were lower by 15.2 percent year-on-year, due to a decrease in arms sales or the effects of translation from foreign currencies. The net profit of the arms group reached 587.8 million crowns in the three months of the year, an increase of 7.9 percent compared to the same period last year. This follows from the consolidated unaudited financial results of the holding, which Colt CZ published in a press release.

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The number of weapons sold by the holding in the first quarter of this year fell by 25.3 percent to 149,511 compared to the first three months of last year. Short firearms were represented by almost 62 percent, long firearms by more than 38 percent. In the first quarter of last year, the war in Ukraine started at the end of February.

The EBITDA indicator adjusted for extraordinary items for the first three months of 2023 for the group fell by 28.4 percent year-on-year to 683.4 million crowns. EBITDA is the economic result before interest, taxes and depreciation. The group invested 154 million crowns in the first quarter, 4.8 percent more year-on-year.

According to CEO and Chairman of the Board Jan Drahota, Colt CZ's results for the first three months of this year are relatively weaker compared to the same period in 2022, which was the strongest first quarter in the group's history. “The financial figures reflect the greater seasonality of our business related to the increase in the share of sales to customers from the armed forces segment, the strengthening of the Czech crown against the USD and EUR, as well as the relative slowdown of the commercial market in the USA in some segments where the CZ brand has traditionally been strong. We expected this development and we responded to it with a number of operational and cost measures,” said Drahota.

At the same time, however, according to him, the group manages to conclude new contracts for the armed forces in key markets. They are central to the holding markets in North America, Asia and Europe. “We positively assess the increase in net profit, which is essential for our ability to pay future dividends to shareholders. The ongoing general meeting approves, among other things, the payment of last year's dividend in the amount of CZK 30 per share, which is 20 percent more compared to the previous year,” he added Precious.

54.2 percent of Colt CZ's total revenues for the first quarter were contributed by revenues in the USA. Revenues in the Czech Republic reached 16.3 percent, revenues achieved on the European market excluding the Czech Republic accounted for 12.7 percent. Canada's share was 7.3 percent, Asia 4.4 percent and Africa 1.7 percent. Revenues in the rest of the world amounted to 3.4 percent.

The management of Colt CZ expects that total revenues this year may reach 15.1 to 16.9 billion crowns, which represents an increase compared to consolidated revenues in 2022 by 3.5 to 15.8 percent. The expected amount of the adjusted EBITDA indicator could reach 3.1 to 3.8 billion crowns this year, which would mean a year-on-year decrease of up to 7.9 percent, or an increase of up to 12.9 percent.

Holding is a leading global manufacturer of small arms for armed forces, personal defense, hunting, sport shooting and other commercial use. It mainly sells its products under the brands Colt, CZ (Česká zbrojovka), Colt Canada, CZ-USA, Dan Wesson, Spuhr and 4M Systems. The group is headquartered in the Czech Republic and has production facilities in the Czech Republic, the USA, Canada and Sweden. It employs more than 2,000 people in the Czech Republic, the USA, Canada, Germany and Sweden. Last year, it reported record revenues of almost 14.6 billion crowns. The adjusted net profit of the holding was almost 2.3 billion crowns after taxation.