Colt CZ sees revenues rise, profit fall yr/yr in Q1

Colt CZ sees revenues rise, profit fall yr/yr in Q1

Prague/Uhersky Brod, South Moravia, May 23 (CTK) - Arms maker Colt CZ Group SE posted revenues of Kc3.667bn in the first quarter of this year, up 21.7 percent year-on-year, while its adjusted net profit dropped by 47.8 percent to Kc359.9m, according to the consolidated unaudited financial results Colt CZ published today.

The decline in profit was due to lower operating margins and a decrease in the result from financial operations on the back of the exchange rate development, the group said.

The number of firearms sold by the group in the first quarter fell by 5.5 percent year-on-year to 140,136. Handguns accounted for almost 59 percent of the total, while long firearms accounted for more than 41 percent. The company's first-quarter sales of long firearms were up year-on-year, while sales of handguns were down.

The group's adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) net of one-off items fell by 28.5 percent year-on-year to Kc488.4m. According to Colt CZ representatives, the decline is related to higher costs for marketing campaigns to support sales in the commercial market in the US, delayed ramp-up of some new products, operating costs for the development of Swiss ammunition maker swissAA, as well as quarterly sales seasonality.

This year's first quarter was the most successful in the group's history in terms of revenues, said CEO and board chairman Jan Drahota.

"We recorded a significant increase in sales to military and law enforcement customers, thanks to among other things the consolidation of the ammunition manufacturer swissAA, but at the same time profitability decreased due to the discount campaigns aimed at boosting the CZ presence in the US commercial market," Drahota said.

For the rest of the year, Colt CZ expects a significant increase in performance, both through organic growth and the consolidation of the results of Sellier & Bellot, whose acquisition by the group was successfully completed as of May 16, he added.

Revenues in the US accounted for 47.7 percent of the company's total revenues for the first quarter. Revenues in the Czech Republic accounted for 17.1 percent, while revenues generated in the European market excluding the Czech Republic made up 11.5 percent. Canada accounted for 11.2 percent, Asia for 4.3 percent and Africa for 0.8 percent. Revenues in the rest of the world represented 7.4 percent.

The group invested Kc183.1m in Q1, up 19 percent year-on-year.

According to Drahota, the group's total revenues this year could reach Kc20bn to Kc22bn, with adjusted EBITDA in the range of Kc4.3bn to Kc4.4bn. Both represent an increase of approximately 40 to 50 percent compared to 2023, Drahota said.

Colt CZ is one of the leading producers of firearms and ammunition for military and law enforcement, personal defence, hunting, sport shooting, and other commercial use. It markets and sells its products mainly under the Colt, CZ (Ceska zbrojovka), Colt Canada, CZ-USA, Dan Wesson, Sellier & Bellot, swissAA, Spuhr and 4M Systems brands.

The group is headquartered in the Czech Republic and employs more than 3,600 people in its production facilities in the Czech Republic, the United States, Canada, Sweden, Switzerland and Hungary.

It is 54.5 percent owned by Ceska zbrojovka Partners SE and 27.7 percent by CBC Europe S.a r.l., with publicly traded shares accounting for 17.8 percent.

Last year, the company posted record revenues of nearly Kc14.856bn for the full year. Net profit reached almost Kc2.043bn.

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