Bulgarian Arms Manufacturer with Unprecedented Revenues for the first 6 months of 2023

Business » INDUSTRY | August 16, 2023, Wednesday // 15:24
Bulgaria: Bulgarian Arms Manufacturer with Unprecedented Revenues for the first 6 months of 2023

For the first half of 2023, the net sales revenue of the state-owned "Vazovski Mashinostroitelni Zavodi" (VMZ) in Sopot increased by nearly 80% and reached 392 million leva, writes "Capital" and adds that this was driven from the increased demand for special production due to the war in Ukraine.

By the middle of the year, VMZ's turnover already exceeded that achieved in the whole of 2021. However, a comparison with the performance in the past 2022 is not possible, adds "Capital", because for another year the Ministry of Economy, under whose hat the arms manufacturer is, has not published its annual financial report, which should be submitted by April 25. With these turnovers, however, it is not excluded that VMZ's record turnovers from 2016-2017, when they exceeded 500 million leva per year, will be improved.

At the arms dealer "Kintex", the downward trend from the last quarters is maintained. Similarly, the Ministry of Economy has not published its annual report for 2022. And from the published interim data for the half year, it can be seen that the 93% collapse in turnover reported in the first quarter of 2023 is maintained at the same rate in the second three-month period of the year. Since the beginning of the war, the export of Bulgarian weapons to Ukraine was not carried out officially, but through private intermediaries, so "Kintex" had no way to feel an improvement in its result - for years the company has been working practically only in Algeria and India.

The factories of the state-owned "Terem - Holding" reported mixed results - from a 202% jump in the turnover of the plant "Khan Krum" in Targovishte to a drop of nearly 40% at the "Tsar Samuil" plant in Kostenets.

According to unofficial information, a large part of VMZ's exports to Ukraine goes through "Bulkomers KS", owned by Kaloyan Stanislavov. According to data from the National Revenue Agency, this company is among the ten largest companies in Bulgaria in terms of recovered VAT for 2022.

Although officially Булгариа does not supply arms and ammunition for the war in Ukraine, the availability of orders is also evidenced by the employment data at the Defense Ministry, which produces anti-tank shells, missiles and other ammunition. VMZ is among the largest employers in the country, and according to data from the National Institute of Statistics, it has 3,973 employees by the end of 2022, which is almost 13% more than a year earlier. The double-digit growth rate of employment is maintained as of the second quarter of 2023 - the interim report for the period shows that by the end of June the number of employees was already 4,024, or an increase of 11% on an annual basis.

In the first quarter of 2023, VMZ reported an impressive 830% growth in sales, which was partly due to the low base for the same period last year. By the second quarter, this effect has already been smoothed out (see the table), but the distinct jump in business remains a fact. And from the activity report, it is clear that due to the growing demand, the management of the company has set itself the goal of increasing the production capacity. The forecast is that by the end of 2023, contracts and orders for another 400 million leva will be fulfilled.

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Tags: VMZ, Bulgaria, ammunition, Ukraine
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