MOSCOW, July 1 (Reuters) - Russia's largest truck maker, Kamaz, in which Germany's Daimler owns a 10 percent stake, reported on Wednesday a 86 percent slump in 2008 net profit to 1.065 billion roubles ($34.32 million).
The results, to international accounting standards, were affected by a sharp drop in demand for trucks as construction firms and other major consumers cancelled projects or delayed fleet renewal as a result of the global financial crisis.
Revenues eased to 96.35 billion roubles from 97.23 billion a year earlier. Profitability was dented by a three-fold rise in finance costs, higher distribution expense and cost of sales.
The company said the fourth quarter was particularly tough, with half as many trucks sold as in the same three months of 2007 as the global slowdown took its toll on Russia.
"The maximum fall in demand was seen in the heavy construction technology market, which is directly linked to the slowdown in the pace of building," Kamaz said in a statement.
"The banking liquidity crisis has above all negatively reflected on this sector of the economy."
The company's debt stood at 22.4 billion roubles, up from 12.8 million in 2007. Of the debt outstanding in 2008, 19 billion roubles was due to mature within a year.
With Russia experiencing its first recession in a decade, this year is set to be even tougher. Industrial production is slumping, many building projects have been left unfinished, factories are being idled and millions of workers laid off.
In January, Kamaz forecast a loss of $46 million in 2009 on sales of 35,000 commercial trucks. Last year it sold 47,500 trucks.
It has halted production seven times since the start of the crisis, with the latest stoppage set to end on July 6. ($1=31.03 ROUBLE) (Writing by Toni Vorobyova; editing by Simon Jessop)