CSG's Q1 Rebound: Orders Soar to Record €17bn as Short-Seller Attack Fades

The numbers are in, and they speak volumes. Czechoslovak Group (CSG) has delivered a first-quarter performance that answers the most pointed questions raised by a recent short-seller assault. Shares surged more than 12 percent to €19.51 on Wednesday, erasing most of the losses triggered by Hunterbrook Media's report. The stock had hit a year-low in early May, but the latest figures have sparked a forceful recovery.

At the heart of the rebound lies an order backlog that has swollen to a record €17 billion, with an additional pipeline of potential contracts worth €27 billion. That is a sharp jump from the €15 billion backlog reported before the quarter closed, reflecting strong demand for land vehicles and heavy munitions. The defence division saw revenues climb by more than a quarter, while the land-vehicle business more than doubled its takings to €173 million.

Production ramp-up and strategic bets

CSG churned out over 800,000 large-calibre rounds in the first three months of the year and is targeting an annual run-rate above one million by 2028. New manufacturing capacity is coming online in Slovakia, adding 70,000 rounds per year, as the group prepares to service long-term contracts with NATO members and customers in Southeast Asia. The shift away from Ukraine is already visible: the region’s share of revenue fell to around 20 percent from 27 percent a year earlier, evidence of a broadening client base.

Meanwhile, CSG has clinched a 49 percent stake in Hirtenberger Defence Systems, the Austrian mortar-munitions specialist. The deal widens the group’s footprint in artillery and land systems, though regulatory approvals are still being finalised. On a separate front, the company is exploring a joint venture in Slovakia with Hungarian partner 4iG.

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EU funding puzzle

A massive framework contract signed by CSG subsidiary ZVS Holding with the Slovak defence ministry – worth up to €58 billion – depends on favourable financing. The group hopes to tap the EU’s SAFE programme, which offers loans at 1 percent over 40 years. But the catch is political: Slovakia needs at least one other EU member to join in order to unlock those terms. Romania has already declined, Croatia is wavering, and the carve-out for individual states expires at the end of May 2026. CSG insists the contract is a framework without firm orders and is not reliant on any single funding source.

Financial health and ratings lift

Total revenue in the first quarter rose nearly 14 percent to €1.54 billion, driven by the defence arm. The civilian munitions division, however, saw sales drop 20 percent. Operating profit came in at €372 million, yielding a margin of 24.1 percent. Debt levels remain moderate, leaving room for further strategic acquisitions.

The improving fundamentals have not gone unnoticed by rating agencies. Moody’s recently lifted CSG to “Baa3”, pushing it into investment-grade territory, while Fitch confirmed a “BBB-” rating. That lowers future financing costs and opens the door to institutional investors constrained by minimum credit thresholds.

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Guidance and next catalysts

Management is sticking to its full-year forecast of revenue of up to €7.6 billion. Jefferies analysts judge the quarterly numbers as “on plan” and maintain a consensus price target of around €35 per share – suggesting significant upside from current levels. The next major check comes on 7 August, when half-year results are due. For now, the short-seller narrative appears to have lost its sting, replaced by a story of order-book growth, operational expansion, and rising credit quality.

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