OKOTOKS, Alta. – Mullen Group has approved a capital budget of $40 million for 2018, most of which will be used to replace trucks, trailers and specialized equipment within its trucking and logistics segment.
The capital budget doesn’t include funds that may be used for acquisitions, which Mullen Group said it will continue to pursue. The company said its trucking/logistics segment will account for about 67% of its revenue in 2018.
“Our expectation for 2018 is that we can achieve moderate growth as a result of the annualization of our recent acquisitions as well as the continued expansion in the overall economy. While the current trucking/logistics market remains extremely competitive, our view is that these pressures will ease throughout 2018 as demand for freight services grows,” the company said in a release. “The tightening of U.S. trucking capacity, as a result of continued economic expansion accompanied by the impact of the mandatory electronic log regulations, is setting the stage for a rebalancing of pricing for freight services in 2018.”
The company expects the Canadian economy to expand moderately next year.
Mullen plans to grow its Moveitonline logistics marketplace, which connects shippers and truckers. It currently has about 12,000 trucks in its system.
Chairman and CEO Murray Mullen said “We believe that 2018 will be sequentially better than 2017.”
In 2018, Mullen said it will continue to pursue acquisitions, increase its capital expenditure to provide its business units with new equipment, accelerate its investment in technology, and invest in Moveitonline.
The company is also hiking its dividend to shareholders, by 67%.
“Over the course of the last couple of years we have had our fair share of challenges. Business suffered as we adapted to the collapse in the oil and gas industry. Employees lost jobs, experienced reductions in their take home pay and shareholders have lost value in their shares as well as a reduction in the dividend,” said Mullen. “Today, however, I am pleased to report that the business fundamentals are strong, employment levels are back to pre-2015 levels, most employees are seeing a recovery in their total pay and we have delevered the balance sheet. In recognition of the turnaround in these fundamentals, the Board has approved a very healthy increase in the annual dividend to our shareholders.”