29 October 2013 20:08 [Source: ICIS news]
HOUSTON (ICIS)--US-based Olin expects the high demand for ammunition to continue into 2014 as more people are becoming gun owners and regular target shooters, company executives said on Tuesday.
Olin's Winchester segment reported Q3 earnings of $40.7m (€29.3m), up from $16m for the same time last year and reaching the highest level of quarterly sales in the history of the company.
While Olin expects a decline in Q4 sales because of the normal seasonal decline in hunting as well as two planned outages, it will still be above the level reported for the same period in 2012.
“This expectation reflects a significant increase in both gun ownership that has occurred in the last five years, as well as an increase in the number of people who have become regular target shooters,” said Olin CEO Joseph Rupp during the company’s Q3 earnings call. “Based on survey data, we believe over the past five years, there have been as many as 8m new target shooters, and therefore ammunition consumers have been created,” he said.
Commercial ammunition demand is expected to continue to be higher than historic levels for the foreseeable future, Rupp added.
“If you look back at the industry 10 years ago, we would have told you that in a normal year, ammunition demand across the spectrum of all types of ammunition [and] qualities of guns was in the 4bn-5bn round range,” said John Fischer, chief financial officer at Olin. “I think we believe today that that number is probably more like 8bn/year.”
($1 = €0.72)
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