OKOTOKS, Alta. – Mullen Group reported improved revenue in the first quarter of 2017 in both its trucking/logistics and oilfield services segments, but the markets remain “fragile,” according to chairman and CEO Murray Mullen.
The company posted Q1 revenue of $284.9 million, up 4.9% year-over-year. The trucking segment grew revenue 4% while oilfield services saw revenue climb 4.8%. Drilling activity improved but Mullen saw a decline in pipeline hauling demand.
Net income was $14.5 million, down 32.2% year-over-year, primarily due to a negative variance in unrealized foreign exchange. Nonetheless, Mullen said he’s seeing optimism returning to the oil and gas segment.
“After two years of reporting declining revenues we are finally starting to experience some growth. The $285 million generated in the first quarter of 2017 remains well below prior peak levels but the results are 4.9% above last year, representing that some early stage stability is returning to the battered oil and natural gas service industry as well as reinforcing our acquisition strategy,” Mullen said.
“I remain of the view that the markets we serve are fragile and that a period of adjustment is still required before our financial performance improves in a more meaningful way but there is a sense of optimism returning to the oil and natural gas industry, which I fully expect will benefit our organization in the second half of the year. In terms of the overall Canadian economy the story is very similar. Freight demand is starting to increase, which will ultimately lead to improved pricing later this year. In the meantime, however, the trucking and logistics sector of the economy remains very competitive.”
Mullen said the company continues to be on the lookout for acquisition opportunities.
“One of our stated strategic initiatives for 2017 centered on growth through acquisitions. In this latest quarter we closed two transactions, the most notable being the acquisition of Envolve Energy Services Corp., opening up a new growth platform for Mullen Group,” said Mullen.
“For the balance of the year we will continue to identify new opportunities that we can benefit from for many years. In addition, we are announcing an increase of $25 million to our 2017 capital expenditure budget in anticipation of a recovery in the energy sector. This is exactly why we took the necessary steps to strengthen our balance sheet in 2016. We are uniquely positioned to proactively pursue opportunities.”