CONTRANS, MULLEN, and TRIMAC are among the Canadian income-fund structured transportation companies to report a strong financial performance despite the uncertainty created by Ottawa's recent move to ...
CONTRANS, MULLEN, and TRIMAC are among the Canadian income-fund structured transportation companies to report a strong financial performance despite the uncertainty created by Ottawa’s recent move to tighten fund legislation.
Contrans Income Fund, enjoyed a record year in 2005, and reported yet another new record in 2006, with an increase of more than 18% in total revenue. Total revenue for 2006 was $455.2 million compared with $385.5 million in 2005.
“We believe that the uncertainty over the tax status of income trusts has not only had a negative impact on the entire sector and investors, but on the economy in general,” said CEO Stan Dunford. “The new limits on the amount of equity that a trust can raise have compounded this effect by further restricting growth. We intend to continue to operate our business the way we always have in spite of these burdens and constraints.”
Mullen Group Income Fund also enjoyed a successful year in 2006, thanks largely to a number of key acquisitions by the company. Mullen generated consolidated revenues of $1 billion in 2006, compared to $591.7 million the year before. Net income was also up, to the tune of $128.1 million compared to $70 million in 2005. Mullen Group attributes the 83% increase in net income to income generated by new acquisitions made in 2006.
The company also enjoyed modest price and volume increases in its trucking/logistics segment. That helped offset some revenue reductions on the oilfield services side of the business resulting from a decline in drilling activity, the company has reported. Mullen Group ended the year with a bang. For the three-month period ending Dec. 31, 2006, Mullen generated consolidated revenues of $284 million – a 76.7% improvement over the same period a year earlier.
Despite a $5 million decline in revenue in the fourth quarter, Trimac Income Fund still boasted a modest 3% gain in total revenue for 2006. Total revenue for 2006 was $323.4 million compared with $313.6 million in 2005. Revenues for the fourth quarter were $79.8 million, compared with $85 million during the same period in 2005.
Company officials said results for the quarter were impacted by reduced activity in the Alberta and British Columbia oil and natural gas sector, severe winter conditions and continued volatility in woodchip volumes.
REIMER EXPRESS LINES has announced it is now compliant with US Customs’ Automated Commercial Environment (ACE). Reimer Express and parent Roadway have been directly involved with ACE since its inception in 2004 and has spent the last six months testing the transmission of electronic manifest (E-manifest) while working hand-in-hand with Customs and Border Protection to evaluate the process to meet the expectations set forth with the introduction of ACE.
CELADON GROUP has announced that one of its wholly owned subsidiaries purchased the truckload business and certain tractors and trailers of Warrior Services Inc. for approximately $8.3 million. According to the seller’s unaudited financial statements, the Charles City, Virginia-based transportation company generated approximately $20 million in gross revenue in 2006.
Steve Russell, chairman and CEO, stated, “We are delighted with the Warrior acquisition and expect it to follow the pattern established in our acquisitions of Digby Truck Lines, CX Roberson and Highway Express during the past few years. In those acquisitions, as in this one, our goals are to continue to broaden our customer base with quality customers, add density in our primary traffic lanes, and gain experienced drivers. Based on our evaluation of the business, we believe Warrior had a core group of quality customers and drivers, but suffered from the excessive cost structure that plagues many mid-sized carriers. We expect to integrate the acquired operations promptly.”
CN RAIL has announced a C$12-million program to increase the container-handling capacity of its Brampton Intermodal Terminal (BIT) by one-quarter. BIT – Canada’s largest intermodal terminal – handled almost 660,000 intermodal units in 2006. Planned improvements for the Toronto, Ont.-area facility will include additional pad capacity for loading and unloading intermodal trains within the terminal, and steps to improve truck throughput. Work should be completed by late summer of this year.
CON-WAY FREIGHT president James P. Worthington appeared before a subcommittee of the US Senate Committee on Appropriations to support cross-border trucking operations with Mexico. He appeared on behalf of the American Trucking Associations.
The US government’s cross border initiative is aimed at expanding cross-border trucking operations with Mexico. The year-long pilot program will simplify freight delivery across the border by allowing US trucks to transport freight directly into Mexico. Certain Mexican trucking companies will be granted rights to make freight deliveries beyond the roughly 20-mile commercial zones currently in place along the border. During his testimony, Worthington noted that the North American Free Trade Agreement (NAFTA) has increased US-Mexico trade by more than 400%, while strict cross-border trucking regulations have meant delays and inefficiencies for motor carriers forced to transfer loads from one country to a neutral loading point before they can enter the destination country.
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