Colt CZ group's revenues fall to Kc3bn in Q1, arms sales down

Prague/Uhersky Brod, South Moravia, May 24 (CTK) - Colt CZ Group SE (Colt CZ) saw Q1 revenues fall by 15.2 percent yr/yr to Kc3bn and its net profit increased by 7.9 percent to Kc587.8m, according to consolidated unaudited financial results Colt CZ published in a press release today.

Lower arms sales and the impact of foreign currency translation are to blame for the drop in revenues, the group said.

The number of firearms sold in the first quarter of this year fell by 25.3 percent to 149,511 units in annual terms. Handguns made up nearly 62 percent and long firearms more than 38 percent of the units sold.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) posted an annual drop of 28.4 percent to Kc683.4m at the end of March.

Investments rose by 4.8 percent yr/yr to Kc154m.

Colt CZ Group CEO and board chairman Jan Drahota said the Q1 results are relatively weaker compared to the same year-ago period, which was the strongest Q1 period in the group's history.

"The financial results reflect higher seasonality of our business which is related to the higher share of sales to M/LE segment (armed forces), strengthening of the Czech crown against the US dollar and the euro and the relative slowdown of the US commercial market in those segments where CZ brand has been traditionally strong," said Drahota.

"We anticipated this development and responded to it with several operational and cost cutting measures," he added.

At the same time, the group is succeeding to secure new contracts for the military in the key markets, namely North America, Asia and Europe, according to him.

"We assess positively the increase of the net income, which is essential to our ability to pay future dividends to shareholders," said Drahota.

"The general meeting, which is currently taking place, is voting to approve the payment of dividend for 2022 in the amount of Kc30 per share, which is 20 percent more than the previous year," Drahota added.

Revenues generated in the United States accounted for 54.2 percent of the Q1 total, Czech revenues made up 16.3 percent, revenues in Europe excluding the Czech Republic 12.7 percent, revenues in Canada 7.3 percent, Asian revenues 4.4 percent and African revenues 1.7 percent. Revenues in other states accounted for 3.4 percent of the total.

The management of Colt CZ expects that total revenues this year may reach Kc15.1bn to Kc16.9bn, which represents an increase of 3.5 to 15.8 percent compared to the consolidated revenues for 2022. Adjusted EBITDA is expected to reach Kc3.1bn to Kc3.8bn this year, which would be an annual drop of up to 7.9 percent or an increase of up to 12.9 percent.

Colt CZ Group is one of the leading producers of firearms for military and law enforcement, personal defense, 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, Spuhr, and 4M Systems brands.

Colt CZ Group is headquartered in the Czech Republic and has production facilities in the Czech Republic, the United States, Canada, and Sweden. It employs more than 2,000 people in the Czech Republic, the USA, Canada, Sweden, and Germany.

Last year, it generated record-high revenues of nearly Kc14.6bn. Adjusted net profit after tax reached some Kc2.3bn.

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