Net Profit Of Russia’s Largest Defense Holding Rostec Falls By 42%

Russian state-owned conglomerate Rostec, the country’s largest industrial holding and a major weapons producer, reported that its net profit fell by 42% in 2025, limiting the corporation’s ability to launch new projects.

Rostec CEO Sergey Chemezov stated this during a meeting with Russian Prime Minister Mikhail Mishustin.

According to Chemezov, despite the company’s revenue increasing by 25% in 2025, largely due to state defense orders, net profit fell to RUB 76.4 billion ($986 million).

“Unfortunately, we do not have many of our own funds left to launch investment projects,” he claimed.

In March 2026, Russian dictator Vladimir Putin signed a decree allowing all financial data of the corporation to be classified. The decision came after several key Rostec subsidiaries reported significant losses or deteriorating financial performance.

KamAZ, a truck manufacturer controlled by Rostec, recorded a net loss of RUB 43 billion ($555 million) in 2025 after truck sales declined by more than 20%.

Uralvagonzavod, Russia’s largest tank manufacturer, cut 10% of its workforce and moved its civilian division to a four-day workweek due to financial difficulties.

The profit of Russian Helicopters declined 2.6-fold, while the United Engine Corporation reported a net loss of RUB 63 billion ($813 million) and increased its debt to nearly RUB 1 trillion ($12.9 billion).

The decline in profits, despite an increase in state defense orders, is linked to companies being required to fulfill government contracts at artificially low prices. As a result, such contracts have minimal profit margins and are often loss-making.

According to Chemezov, the profitability of contracts under Russia’s state defense order system is around 2%. At the same time, military acceptance procedures do not account for all overhead costs, meaning this 2% margin is sometimes insufficient even to cover all expenses.

Large Russian state corporations typically offset these losses through export contracts, government subsidies, preferential loans and the production of civilian goods. However, as the Russian economy continues to deteriorate, companies are finding it increasingly difficult to do so.

Rostec

Rostec is the backbone of Russia’s military industry and unites key manufacturers across nearly all major segments of defense production.

The corporation’s enterprises produce Su-57, Su-35S, Su-34 and Su-30SM2 combat aircraft, Il-76MD-90A military transport aircraft and Yak-130 combat trainers, as well as Ka-52, Mi-28NM, Mi-35M, Mi-8AMTSh and Mi-26 attack and transport helicopters.

Rostec’s structure also includes manufacturers of T-90M, T-72B3M, and T-80BVM tanks; BMP-3 and BMD-4M infantry fighting vehicles; Iskander-M operational-tactical missile systems; Pantsir-S1 anti-aircraft missile-gun systems; Kornet anti-tank missile systems; Krasnopol-M2 guided artillery munitions; and small arms, including AK-12 assault rifles.

The corporation also produces military electronics, avionics and electronic warfare systems, including the Khibiny and Vitebsk aircraft protection systems, the Rychag-AV helicopter electronic warfare system, and the Krasukha, Rtut-BM, and Borisoglebsk-2 ground-based systems.

According to Russian authorities, Rostec enterprises produce around 80% of the weapons and military equipment used by Russian forces in the war against Ukraine.