Due to the ongoing conflict between Russia and Ukraine, big defence companies are putting more effort into making more military equipment.
One such company is Lockheed Martin, an American defence and aerospace company that has positioned itself as a major player in the war profiteering game.
Recently, the company announced a record-breaking production of its Himars MLRS, a multiple rocket launcher system that many nations are now lining up to use.
Himars has proven to be highly effective, allowing the Ukrainian armed forces to gain decisive victories over the Russian army, most notably in the counteroffensive launched in September and October 2022 that led to the recapturing of Kherson.
Given the system’s success, the US military has provided $2 million in aid, including ammunition for Himars, which has been combat tested and proven highly reliable.
In fact, in December, the army awarded Lockheed Martin the contract for full-rate production of the high mobility artillery rocket system M142 launchers, to support both the US Army and its overseas military sales partners.
Several nations, including Lithuania, Latvia, Estonia, and even the Netherlands, have lined up for purchase.
Meanwhile, on the other front, the company is hopeful that Australia’s defence review will lead to an increase in orders for its F-35 fighter jets.
China still has the largest conventionally built military since World War II, according to Australia’s defence minister.
The decision to give new defence equipment to Australia is largely due to the country’s strong relationship with the U.S., which wants to counter China’s growing influence in Taiwan and the South China Sea.
A multiple-fold increase in revenue through war profiteering
As the diplomatic tensions between these countries keep getting worse, the profits of war companies like Lockheed Martin speak for themselves.
The company’s revenue base stands at $66 billion, with strong stock returns of about 24 per cent in the last 12 months.
The sales of Lockheed Martin have risen at a decent growth rate of 3.4 per cent to the current valuation.
People say that the high production of its Sikorsky helicopter programs, AC-3, and long-range anti-ship missiles, among other things, is to blame for this growth.
As the war in Ukraine continues to last for more than a year, the business will likely continue to increase as countries increase their defence spending.
Even though there are moral concerns about making money off of war, companies like Lockheed Martin are likely to keep growing as long as there are conflicts around the world.
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