OKOTOKS, Alta. – Mullen Group reported record first quarter revenue for its trucking/logistics segment, but continues to face headwinds in its oilfield services division.
The company generated consolidated revenue of $292.1 million, up 2.5%, thanks to record revenue in trucking/logistics, which was up $26.6 million to $207.5 million. Its oilfield services division saw a $20-million decline, to $84.6 million.
Its operating income before depreciation and amortization (OIBDA) was down $3.8 million, to $41.7 million, thanks to a $9.1-million decrease in the oilfield services segment.
Acquisitions drove $9.9 million in incremental revenue in trucking/logistics.
Mullen Group reported better margins in its truckload services, thanks to rate increases and tightening capacity.
“Our results in the first quarter are a reflection of what is happening here in Canada. Robust job growth has supported consumer spending and contributed to an improving trucking and logistics industry,” said Murray Mullen, chairman and CEO of Mullen Group. “This trend accompanied by recent acquisitions were the two primary reasons our trucking/logistics segment generated the highest quarterly revenue in our history. We also started seeing, for the first time in many years, signs that pricing leverage is returning to the industry. From this perspective the Canadian economy appears to be on solid ground.
“However, business sentiment and capital investment remained subdued particularly in western Canada. As a result our oilfield services segment really suffered this quarter. Drilling activity was down from last year, projects remained mired in consultation or were delayed and generally there was a lack of confidence. Quite simply there was a lack of demand across nearly all of our oilfield services segment and until capital starts to be invested in the oil and natural gas industry, our oilfield services business will suffer. This is why we will continue to focus all of our attention on growing both the top line and the operating margins in our trucking/logistics segment. It was a difficult quarter for our company and I am hopeful that our political leaders can find a way to encourage capital investment to return to Canada. When this occurs we will once again consider investing in the oil and gas services industry.”