RIO DE JANEIRO, BRAZIL – Shares in Brazil’s largest handgun manufacturer Taurus (TASA4) rose 10.6 percent on Friday, November 13th, after the company posted its Q3 results. In the period, the company posted a record production, sales volume, net revenue, EBITDA (earnings before interest, taxes, depreciation, and amortization), EBITDA margin and net profit. In the year, its shares have increased by over 60 percent, while the IBOVESPA index is still accumulating losses of ten percent.
In Brazil alone, arms sales totaled 90,000 units in Q3, compared to 33,000 in the same period last year. In the first nine months of the year, arms sales in the country increased by 137.7 percent annually.
“Sales of Taurus arms in the Brazilian market have shown a continuous increase and, although the volumes are much lower than in the U.S., a country that concentrates the world’s largest market in the sector, the percentage growth of units sold domestically continues to be the greatest highlight,” Taurus said on its quarterly trial balance.
In the United States, home to the bulk of its revenue, sales in Q3 grew by 35 percent, from 283,000 to 383,000 weapons. In the year to date, sales in the American market have reached 1.075 million weapons, against 191,000 in Brazil.
For 2021, Taurus expects its sales to grow even further in the United States, due to the victory of Democratic candidate Joe Biden in the presidential elections. “As everyone knows, the biggest market for our weapons is the U.S. and political factors can influence people’s reaction, with consequences for the consumer market. Historically, in the years following the election of a Democratic candidate for the U.S. presidency, there has been an increase in demand for weapons.”
With arms sales rising, the company doubled net operating revenue in Q3 to R$490.8 million. Net profit stood at R$102.22 million, compared to a net loss of R$26.4 million in the third quarter of 2019.
“The result was heavily impacted by the increase in volume and the rise in the dollar and this led the company to reverse the loss. Perhaps that is the reason for the company’s successful performance on the stock market today,” said Arthur dos Santos, a Blue Trade fund specialist.
Source: Exame