Financial drop after boom across Bulgarian weapon factories

Photo: dnevnik.bg

Printed media have issued publications these days, saying that the reports of the state-owned military plants in Bulgaria have registered a drop in their sale numbers over the first trimester of 2018. This information makes strong impression, given the results of the same period in 2017. That was the time when the armament factories had been improving their results which had been good either way. The number of employees was on the rise as well. That had been determined as a result of the military conflicts all over the world and it was also due to rearmament processes across sensitive regions like the Middle East, India and North Africa, where the Bulgarian arms industry had profitable market positions.

The private companies haven’t published their reports yet, but well-informed sources claim that the trend is common. The Capital Daily sees the recent arms industry boom as being now over. The edition comments that business within the sector is cyclic as a whole and strongly depends on the global political situation – especially in countries that are traditional clients of Bulgarian special production’s producers. Exactly that type of conflicts in regions of that kind gave a chance to the Bulgarian arms industry a few years ago. However, now the cycle begins to turn vice versa, as there have been indications for reduction in the number of purchase orders for some 6 months now. The revenues of Vazovski Machine-building Plants (VMZ) EAD dropped sharply over the first trimester of 2018 and the profit shrank 28 times. The annual results of the Sopot plant with 4,500 employees also showed decline, more moderate though. The report of the Kintex trade company shows a revenue drop of a bit over 25% and a revenue decline of 8%. Manpower cuts have already begun across several plants, the private Arsenal among them. At the same time other companies rely on the natural reduction of personnel – retirement and job leavers.

The only exclusion of the overall picture within the sector is the Avionams JSC Plovdiv-based aircraft repair plant, which won a contract with NATO some time ago for the repair of helicopters to the tune of USD 160 mln. The company reported 11% in revenue money for the first trimester of 2018 and has registered profit. Its 2017 growth was even more impressive.

Compiled by: Stoimen Pavlov

English version: Zhivko Stanchev


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