IPG Photonics Reports Continued Production at Russian Operations
Mar 3, 2022 By MarketDepth
IPG Photonics Corporation (NASDAQ: IPGP) has reported information regarding its Russian operations in light of current events. IPG’s Russian facilities will continue operation and manufacturing of optical components and finished products for its operations in the United States, Germany and China. The company’s major production and R&D facilities have almost 2,000 employees located in Russia. The facilities supply components that Germany and the United States use in production and provides finished products to China and the United States. In 2021, IPG’s Russian operations have supplied USD 100 Million of finished product for the Chinese market. In the past, sales to Russian customers have totaled USD 30 Million.
Delays in Shipping
Sanctions will increase timing on shipping costs for components and lasers to and from IPG’s Russian operations. IPG has built several months of critical inventory in Russia to support sales. The company’s facility in Russia is able to ship optical and other components to IPG affiliates from Russia. Plans for sanctions and other developments resulting from ongoing Russia-Ukraine war have been made but substantially limit IPG’s potential, including exporting optical or other components to or from Russia as the Company’s sales may be materially impacted.
Low Cash Balance
The cash balance in Russia is less than 1% of the total current cash and the Russia operations are self-funding. In an attempt to preserve cash, IPG has suspended further capital investment in Russia other than for maintenance and non-material items as IPG has no operations in Ukraine.