OKOTOKS, Alta. — Mullen Group grew its truckling/logistics revenue in the fourth quarter and full year 2015, however it was not enough to offset spiraling declines in its oilfield services segment.
The company reported Q4 and full year results yesterday. Trucking/logistics revenue was $177.5 million in the fourth quarter (up 21.5% year-over-year) and $714.8 million for the year (up 25.2%).
But oilfield services revenue dropped 45% in the quarter to $109.7 million and was down 41.7% to $501.1 million for the full year. Mullen Group reported Q4 net income of $2.4 million, down 89.2% year-over-year. Its full-year 2015 net income was $13.4 million, down 85.8% from 2014. (Adjusted net income was $13.4 million and $73.6 million for the fourth quarter and full year, respectively).
Mullen reported virtually all of its businesses in the oilfield services segment saw declining revenue during the fourth quarter due to crashing commodity prices.
The company attributed growth in its trucking/logistics revenues to the acquisition of Gardewine and Courtesy Freight Systems. However, it noted demand for freight services in Alberta was down.
“The oil and gas sector is quite simply a mess,” said Murray Mullen, chairman and CEO of Mullen Group. “Commodity prices have been decimated by the continued oversupply situation, lack of demand and now ruthless financial markets, which always look to take advantage of any opportunity. The results are both evident and devastating to anyone involved in the oil and gas sector. Producers’ cash flows have declined significantly, negatively impacting capital investment projects, drilling activity and overall industry demand levels for all services. In addition, the prolonged downturn has stretched industry balance sheets, another drag on investment and spending levels by the producers.
“Here at Mullen Group we have not been spared from the industry slowdown. Revenue and profitability have been negatively impacted, particularly in those business units in our oilfield services segment. Even our business units in our trucking/logistics segment leveraged to the Alberta and Saskatchewan markets are negatively impacted by the slowing economy.”
Mullen said the company’s diversification is helping it weather the storm.
“We always take a long term view, looking for opportunities to build sustainable competitive advantage,” Mullen said. “A perfect example of this strategy is related to the regional less than truckload business in Canada. Our latest acquisitions have now positioned Mullen Group with the largest terminal networks in Canada, serving customers and communities alike. From this perspective I am quite proud of the steps and initiatives we undertook over the course of the last couple of years. We prepared for a cyclical downturn in the oil and gas industry and undertook initiatives to grow for the future.”