Rostec’s Profit Collapse Highlights Financial Strain on Russia’s Defense Giant

State conglomerate Rostec reported a 42 % drop in net profit for 2025, falling to 76.4 billion rubles (? $986 million) despite a 25 % rise in revenue. CEO Sergei Chemezov told Prime Minister Mikhail Mishustin that the surge in revenue was driven largely by state defense orders, yet the company “does not have much of our own money left to launch investment projects.” The decline underscores mounting pressure on the Kremlin’s primary defense and manufacturing holding amid ongoing war-related demands and Western sanctions.

Moscow Times

The profit slump occurs as Russia’s war in Ukraine and Western sanctions continue to reshape the economy. In March, President Vladimir Putin signed a decree allowing Rostec to classify all financial data, ending the publication of detailed annual statements after several subsidiaries reported heavy losses. The decree reflects the state’s effort to shield sensitive economic information while grappling with debt-laden operations.

Moscow Times

Rostec’s portfolio includes more than 800 entities across 60 regions. Its truck-maker Kamaz, a Rostec-controlled subsidiary, posted a net loss of 43 billion rubles (? $555 million) after truck sales fell over 20 %. Uralvagonzavod, Russia’s largest tank manufacturer, reduced its workforce by 10 % and shifted its civilian division to a four-day workweek, citing financial difficulties.

Moscow Times

Chemezov emphasized that higher defense orders could not offset the broader fiscal squeeze, noting the limited internal funds available for new investment projects. He framed the revenue growth as a short-term boost that does not resolve the underlying debt and sanction pressures confronting the conglomerate.

Moscow Times

“Unfortunately, we do not have much of our own money left to launch investment projects.” — Sergei Chemezov, CEO, Rostec

Moscow Times