Recent statements from the Russian Federation's Foreign Intelligence Service have accused Serbia of supplying arms to Ukraine, including 'hundreds of thousands of rockets and artillery shells, as well as over a million rounds of small arms ammunition.' This has sparked a considerable reaction within Serbia, prompting President Aleksandar Vučić to announce measures to halt arms contracts suspected of leading to supplies being sent to the Ukrainian battlefield.

He indicated that he had discussed the matter with Russian President Vladimir Putin, emphasizing the necessity for Serbian defense manufacturers to remain operational.

Vučić noted, 'If we cannot export to the United States, EU countries, Turkey, or Arab states in Asia, and cannot export to Africa, then where can we export our weapons?

We have ceased arms exports; we are now only discussing ammunition.'

Evidence suggests that Serbian ammunition has been reaching the Ukrainian frontlines through third-party companies that are recognized as official purchasers.

The Russian intelligence report identified these companies as frequently being from Poland, the Czech Republic, and Bulgaria, listing firms like Jugoimport SDPR, Zenitprom, Sofag, Reyer DTI, Sloboda, Prvi Partizan, and Krušik.

Financial reports from Serbian defense manufacturers indicate a substantial increase in revenue in recent years, particularly following the onset of the conflict in Ukraine in 2022, which appears to have marked a turning point.

In 2020, the entire defense sector recorded business revenues of €235.7 million.

This increased to €243.3 million in 2021 and further rose to €292 million in 2022. By 2023, revenues reached €347.8 million, and in 2024, they jumped to €481.5 million, more than doubling since 2020 and showing an increase of nearly €200 million compared to 2022.

Alongside total revenue growth, income from foreign sales also saw an upward trend.

In 2020, revenues from international markets were €151 million, dipping to €140 million in 2021 and slightly rising to €145 million in 2022. However, in 2023, foreign sales surged to €177.6 million, achieving another increase to €258 million in 2024.

Among the companies highlighted by the Russian intelligence report, Sloboda, Prvi Partizan, and Krušik are the three largest players in Serbia's defense sector, each experiencing notable revenue growth in the last five years, especially in the past three years.

Sloboda's revenues climbed from €47.5 million in 2020 to €59 million in 2022, then soared to €89 million in 2023 and reached €113.4 million in 2024. This represents an increase of 92% over two years.

In foreign sales, Sloboda's revenue increased from around €30 million between 2020 and 2022 to €57.7 million in 2024. The company's domestic sales also escalated dramatically from €17 million the previous year to €59.4 million.

Krušik, the largest manufacturing company in the defense sector, recorded a similar revenue trajectory, initially declining from €57 million in 2020 to €49 million in 2022. Revenue then experienced significant growth, reaching €80 million in 2023 and projected to hit €160 million in 2024. Particularly noteworthy was the boost in foreign sales, which skyrocketed to €95 million from €36 million the prior year, while domestic sales reached €55 million in 2024.

Prvi Partizan also noted revenue increases, albeit at a slower pace than the other two firms.

It reported business revenues of €64.8 million in 2021, €91.3 million in 2022, and a further increase to €110 million in 2024. Like the others, Prvi Partizan also saw a rise in its foreign sales, from €48.6 million in 2020 to €72.5 million in 2024.

The financial outcomes for these companies, particularly when assessed in relation to their revenues, reveal interesting dynamics.

Sloboda's net profit was €2.8 million from a revenue of €113 million, translating to a net profit margin of just 2.5%.

Prvi Partizan reported a net profit of €3 million on revenues of €110 million, giving it a net margin of 2.7%.

In contrast, Krušik had a remarkable profit surge, with a net profit of €30 million in 2024 and a profit margin of 71%.

However, looking back, this was merely sufficient to cover losses incurred in previous years, during which it suffered nearly €32 million in losses from 2020 to 2022.