Whether assault rifles, pistols or grenade launchers – the armament manufacturer Heckler & Koch has been doing lucrative business with handguns for years. However, profits are now falling significantly.
Germany’s largest manufacturer of handguns, Heckler & Koch, made significantly less profit at the beginning of the year. According to a statement from the company on its website, net profit in the first quarter of 2024 fell to 2.4 million euros, only a quarter of the comparable figure from the beginning of 2023 (10.0 million euros). Sales, meanwhile, rose by 1.8 million to 75.0 million euros – the business thus became significantly less profitable than before.
A company spokesperson explained the development with seasonal fluctuations. For some orders, the deadlines and thus the sales and profit effects were outside the first quarter. “In the second quarter, we were on a very positive growth path.” No figures have yet been published for this.
The company, which is inviting people to its annual general meeting in Rottweil this Tuesday (10 a.m.), produces assault rifles, machine guns, pistols and grenade launchers – weapons that a soldier can carry. H&K does not manufacture larger military equipment. After the company was in crisis for the past decade, things started to look up in 2018. In 2022, H&K had the best financial year in its history, in 2023 sales stagnated at just over 300 million euros and net profit fell by 43 percent to 28.7 million euros. The management team was nevertheless satisfied, after all, the level of business was still high. But it is now apparent that the downward trend in profits at the beginning of this year has continued.
Other arms manufacturers benefit more from the Ukraine effect
While the war in Ukraine triggered a strong surge in demand for arms companies such as Rheinmetall, the impact on Heckler & Koch was limited – the focus of Western countries’ support for Ukraine was on large military equipment and ammunition – such as tanks, anti-aircraft guns and 155-millimeter artillery shells. Small arms – i.e. handguns – were not the most urgent in terms of deliveries.
An exception to this is the company Dynamit Nobel Defense (DND) from North Rhine-Westphalia, which has already delivered 13,000 RGW 90 anti-tank grenades to Ukraine, according to a list from the German government. According to the list, Heckler & Koch only delivered 100 grenade launchers, 100 machine guns (MG5) and 500 pistols. The small competitor CG Haenel from Thuringia delivered around 2,200 rifles.
Although H&K’s share of direct German aid to Ukraine is rather small, it has nevertheless benefited from the consequences of the Russian threat, which became apparent with the annexation of Crimea in 2014, and countries such as Norway have bought significantly more in the years since.
Source: Stern
