Six Russian enterprises among Top 100 world`s leading defense companies.

The Defense News weekly, which stands out among the most popular defense magazines and newspapers, has published its traditional Top-100 ranking of the world`s leading defense companies for 2018 (Defense News 2018 Top 100). The piece of information about Russian enterprises, which have been included in the list, speaks for the fact that the Russian defense industry has not lost positions on the global market and strengthened its presence there.

Almaz-Antey's most recent S-400 Air Defense System production plant, opened in 2016
(Credit: Almaz-Antey)

Before analysis of the Top-100 ranking, one should make some comments about it. The defense revenue of a company for the previous year (2017) is the main criteria. If it is a case of a multifaceted enterprise, such as Boeing, Airbus or the Russian Helicopters (a subsidiary of the Rostec state corporation), the revenue of its military division is the key indicator.

As mentioned earlier, the Russian defense enterprises have demonstrated substantial success on the global market. The Almaz-Antey concern has entered the Top-10 world`s largest defense enterprises for the first time, with defense revenue for 2017 reaching USD9.125 billion (in 2017, the concern was ranked 11th). The United Aircraft Corporation has secured its 14th place, while its 2017 defense revenue reached USD6.197 billion. The Tactical Missiles Corporation (KTRV) has shored up its market positions in a drastic manner and held the 25th place (USD3.573 billion) in the Defense News 2018 Top 100, seven points up compared to 2017. The Russian Helicopters holding, which was not included in the previous year`s list of the world`s largest defense companies, has been ranked 36th, with its 2017 defense revenue reaching USD2.735 billion. The Uralvagonzavod (UVZ) research-and-manufacturing corporation (a subsidiary of Rostec) has almost retained its market positions, one point down compared to the company`s 2017 results (the 46th place and the 45th place, respectively). The UVZ`s 2017 defense revenue reached USD1.865 billion. The Concern Radio-Electronic Technologies (KRET, a subsidiary of Rostec) was ranked 48th (the 50th place in 2017), since its 2017 defense revenue reached USD1.677 billion.

Analyzing the Defense News 2018 Top 100, one can state that all the six Russian companies exceeded their defense revenues in 2017. The growth varied between 3% (the Russian Helicopters) and 25% (KTRV), reaching 39% (Almaz-Antey).

The Defense News weekly`s ranking demonstrates that defense hardware dominates the total revenues of the abovementioned Russian enterprises. According to the 2018 Top-100 list, the Russian Helicopters holding has the largest share of civil production (36%). The company is followed by UVZ (29%), UAC (20%) and KRET (15%). The share of civil production in the total revenue of both KTRV and Almaz-Antey for 2017 does not exceed 1%. Therefore, defense hardware sales have fully contributed to the abovementioned success of the six companies.

In this context, one should distinguish the results of KTRV and Almaz-Antey, since the companies increased their defense revenues by 25% and 37% in 2017, respectively. It should be mentioned that Almaz-Antey has been ranked third in terms of defense revenue growth, coming short of only Japan`s Kawasaki Heavy Industries (77%) and France`s Dassault (57%).

The growth of KTRV`s defense revenue is almost equal to that of the largest defense companies, such as the US-based Leidos (15th place, 23%). The financial performance of the Corporation in 2017 allows naming it the biggest consolidated manufacturer of air-launched weapons on the global market. Moreover, KTRV has gained such revenue, owing to defense hardware sales (as mentioned earlier, the share of civil production in the company`s 2017 total revenue does not exceed 1%). These figures apparently demonstrate the global demand for KTRV`s air-launched weapons.

The combined 2017 defense revenue of the six Russian defense companies in the Top-100 ranking has reached USD25.17 billion, several dozen percent up compared to that for 2016 (USD19.41 billion) and 2015 (USD20.54 billion). Therefore, the combined defense revenue of these enterprises has increased by 25%.

However, the Defense News 2018 Top 100 can be named a discriminatory ranking. For instance, it does not include JSC RTI (a subsidiary of Joint-Stock Financial Corporation Sistema), which was included in the list of the world`s biggest defense companies in 2017 (86th place with 2016 defense revenue of USD565 million). The company`s revenue could hardly drop threefold during a year (the 100th company in the Defense News 2018 Top 100 has a defense revenue of USD194 million for 2017). Previously, the Russian Helicopters holding dropped out of the Defense News 2017 Top 100 for unclear reasons.

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