Russian truckmaker Kamaz struggles to settle payments due to sanctions, CEO says
2022.06.17 00:30
Sergey Kogogin, CEO of Russian truckmaker Kamaz, attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 3, 2017. REUTERS/Valery Matytsin/TASS/Host Photo Agency/Pool
(Reuters) – Kamaz, Russia’s largest truckmaker, sees its exports stagnating at last year’s levels or falling slightly as clients shy away from settling payments with the firm after it was hit by Western sanctions, its chief executive said on Thursday.
Under EU and UK sanctions as part of Western sanctions over Russia’s military intervention in Ukraine, Kamaz has seen its foreign clients become hesitant or even reluctant to make payments to the firm.
The company, which mostly exports trucks to former Soviet countries, had planned to sell some 5,000 trucks abroad this year but has since lowered its target to between 4,000 and 5000, CEO Sergei Kogogin said.
“We have not lost our client base,” Kogogin told reporters on the sidelines of the St. Petersburg International Economic Forum. “Payments are the main issue when it comes to exports. Our partners have difficulty understanding how they can pay us. And we also have difficulty understanding.”
Kogogin said Kamaz’s competitiveness as an exporter has also been hampered by a stronger rouble, which is beneficial to importers but hits the revenue of exporters given that they receive smaller rouble proceeds for selling their goods abroad for other currencies.
With the current exchange rate – at around 56.95 roubles per U.S. dollar and 59.17 roubles per euro – Kogogin said profit from Kamaz’s exports this year would be “zero in the best case scenario”.
On the domestic market, Kamaz expects to increase sales to 45,000 trucks from 36,400 last year as it fills the void left by the exit of European truck brands from Russia.
Kamaz’s revenue is expected to fall in 2022, in part due to a drop in the production of its more expensive K4 and K5 models.
“It’s painful for us because expensive trucks generate the bulk of the company’s cash flow,” Kogogin said.
