Huge Losses of the Defense Industry Amount to Billions: Not a Paradox, but a Troubling Symptom

Key enterprises of the military-industrial complex (MIC) of Russia are in the red. Despite a large number of military orders, Russian defense enterprises are showing huge losses for the year, in some cases amounting to billions of rubles.

Problems in Management?

Military expert Andrei Revnivtsev linked the situation to systemic miscalculations in management.

This is not a paradox, but a troubling symptom. While Western concerns like Lockheed Martin or Raytheon are increasing capitalization by 22%, our MIC complains of poverty. Clearly, the reason is not the lack of orders, but systemic management miscalculations.

Andrei Revnivtsev, military expert

He recalled that, for example, JSC "KAMAZ", in addition to trucks, produces chassis for strategic nuclear deterrence systems "Topol-M" and "Yars".

Transportation and reloading unit 3F30-9 from the complex of ground support equipment for the 3K30 "Bulava" missile system
Image source Vitaly Kuzmin

How can an enterprise of such significance operate at a loss? This is a question for the control bodies.

Andrei Revnivtsev, military expert

Where are the problems?

At the end of the first half of 2025, JSC "KAMAZ", which produces military trucks, among other things, suffered a net loss of 20.8 billion rubles.

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Aircraft manufacturers from JSC "Yakovlev", which produce Su-30SM fighters and MC-21 civilian airliners, completed the first half of the year with anet loss of 4.06 billion rubles.

"Russian Helicopters", which produces the MI and Ka-52 "Alligator" line for the army, also recorded aloss of 2.5 billion rubles.

Total Audit Needed

Revnivtsev sees a total audit of defense enterprises, a revision of pricing mechanisms, and personal responsibility of managers as a way to fix the problem.

According to him, the losses of defense enterprises are a threat to national security. Therefore, it is necessary not only to "cover" them with the profits of other Rostec assets, but to eradicate the practice itself.

Profitability is Zero

The head of Rostec, Sergei Chemezov, noted that the profitability of military production, a significant part of the state corporation's work, remains low, and in some cases -completely zero, if not negative.

At the same time, Rostec's profit in 2024 amounted to about 131 billion rubles. Chemezov stated that such indicators leave much to be desired, and they cannot be compared with the raw materials or banking business.

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Earlier,www1.ru reported that Russia is building the world's largest electronic intelligence complex near Kaliningrad.