OKOTOKS, Alta. — Mullen Group reported record earnings for 2013, but the trucking segment suffered from inclement weather in the fourth quarter, as well as mid-week holidays in the month of December.
Mullen today reported its Q4 revenues of $367.4 million were up 6.2% compared to 2012, mostly due to the oilfield services segment. Fourth quarter revenue in the trucking/logistics segment was up 3.1% to $141.9 million. Mullen attributes the gains to the acquisition of Jay’s Moving & Storage and an increase in fuel surcharge revenue.
However, those gains were muted by decreased demand for heavy-haul services related to the oil sands and mining sectors.
The fourth quarter saw Mullen post net income of $20.3 million, a 6.9% decrease from 2012, but when adjusted to eliminate the impact of unrealized foreign exchange, net income was up slightly year-over-year.
“Our operating performance in the fourth quarter was somewhat below our expectations due to a couple of factors. First, the positive trends that we saw at the start of the quarter were negatively impacted by weather related issues. Western Canada experienced some extreme snowfall and a severe cold snap in December, which adversely affected our operating entities,” explained Stephen Lockwood, president and co-CEO of Mullen Group. “Second, the timing of the mid-week holidays in the month of December resulted in a substantial slow down during the last 15 days of the month. Profitability was negatively impacted to an even greater extent due to a combination of reduced productivity levels and higher operating expenses notably wages, fuel, repairs and maintenance.”
For the full year 2013, Mullen Group saw its revenue increase 0.7% compared to 2012, to a record high $1.44 billion.
The Jay’s acquisition added $23.7 million to Mullen’s trucking/logistics revenue.
Mullen reported a profit of $143.3 million on the year, up 9.5% compared to 2012.
“I am pleased with our operating performance in 2013,” said Murray Mullen, chairman and CEO. “This is all the more satisfying in light of the challenges we faced in 2013 of which there were many, including, slow economic growth, flat drilling activity year-over-year, a very competitive operating environment, adverse weather conditions and an extremely challenging December. Notwithstanding these challenges, we achieved record results, which speaks to the strength of our business model.”
Mullen said 2014 looks good, though modest growth is expected.
“For 2014 I am optimistic that the market conditions will provide Mullen Group the opportunity to produce another year of record results, although the improvements will be modest due to the competitiveness of the market,” Mullen said. “The outlook for GDP growth in North America is expected to be positive but at 2-3% that suggests our trucking/logistics segment will be challenged to grow. In our oilfield services segment the opportunities are brighter with overall spending by the oil and natural gas industry in western Canada projected to increase by 8-10% in 2014. This increased spend accompanied by the $100 million in new capital we will invest in our operating entities should translate into growth.”