Hellenic Defense Systems Signs €24 Million Deal with Slovak MSM Group Amid Questions Over Past Pricing

The agreements involve the filling of 155mm artillery shell casings with TNT at EAS’s facilities in Lavrio, southeast of Athens.

Greece’s state-owned defense company, Hellenic Defense Systems (EAS S.A.), has approved three new contracts worth a total of €24 million with Slovak defense manufacturer MSM Group.

The agreements involve the filling of 155mm artillery shell casings with TNT at EAS’s facilities in Lavrio, southeast of Athens. The contracts cover the processing of 50,000 L15 shells, 100,000 M107 shells, and 50,000 extended-range (ER) shells. While MSM Group will provide the necessary raw materials—metal casings, explosives, and packaging pallets—EAS will be responsible for explosive filling, X-ray quality control, and final packaging of the munitions.

The deal was finalized on June 24, 2025, when MSM officially accepted EAS’s proposed unit prices: €134 per unit for the L15 and ER types, and €106 per unit for the M107 shells. EAS’s board has authorized CEO Christoforos Boutsikakis to sign the contracts and oversee any future modifications that do not affect the financial terms. The contracts are scheduled to be signed before August in order to allow time for the necessary import and export permits for military equipment to be issued.

However, the deal has sparked scrutiny within Greece due to the notable price increase compared to similar agreements signed in recent years under the previous EAS administration. During the tenure of former CEO Nikos Kostopoulos, contracts for the same service—filling 155mm M107 shells—were priced significantly lower. Between December 2022 and January 2024, the cost per unit for filling 50,000 shell casings ranged from €80 to €90, with an average price of €86.67. In contrast, the new agreement under Boutsikakis sets the unit price at €106, despite doubling the quantity to 100,000 units. The increase of €19.33 per unit—approximately 22%—is raising questions about why the company is now charging substantially more for essentially the same work, particularly since the client (MSM Export) and the technical specifications have remained unchanged.

The debate extends deeper into internal company concerns about whether previous contracts were priced below the actual cost of production. According to internal figures from 2022, the direct cost of filling a shell was estimated at €70.30. This cost estimate appears not to have been revised in subsequent contracts, as no updated figures have been officially recorded. Based on this assumption, the profit margin on these contracts has increased considerably over time. In 2022, EAS was earning a margin of around 13.8% (selling at €80). By 2024, the margin grew to 28% (selling at €90), and under the latest agreement, the margin appears to have jumped to over 50%, with a unit sale price of €106.

To illustrate this shift, in 2022 EAS charged about €1.14 for every €1 spent on production. That ratio rose to €1.28 in 2024 and now stands at €1.51, reflecting a significant boost in per-unit profitability. If this trend is not clearly reflected in the company’s financial performance for 2025, it could indicate either that production costs have been underestimated or that profit margins have not been accurately documented. Such discrepancies may prompt further scrutiny from financial auditors or regulatory authorities, especially if it is determined that earlier low prices either provided undue benefit to external parties or failed to protect the financial interests of the Greek defense manufacturer.

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