Mullen acquisitions improve revenue, but income drops
October 2, 2007
CALGARY, Alta. - The Mullen Group Income Fund's revenue of $218.9 million for the second quarter was an increase over the same period in 2006 and is attributed to the revenue generated by the six new ...
CALGARY, Alta. – The Mullen Group Income Fund’s revenue of $218.9 million for the second quarter was an increase over the same period in 2006 and is attributed to the revenue generated by the six new businesses added to the Mullen group since April of 2006.
The consolidated revenue of $218.9 million was an increase of $18.9 million or 9.5% over the same period last year and the fund generated operating income of $24.7 million.
“The operating environment during the quarter was challenging for both of our operating segments. Nevertheless, we were very pleased with the operating performance of our trucking/logistics segment and the business units in production services and specialized services,” said Stephen H. Lockwood, president and co-CEO.
“Our diversified business model and our focus on cost controls and operational efficiencies enabled us to achieve reasonable overall results during the quarter.”
The fund’s operating income of $24.7 million was a decrease of $9.8 million or 28.4% compared to the same period last year.
This decrease was attributable to the operating losses generated by the business units in drilling-related services caused by the decline in drilling activity and the increase in selling and administrative costs associated with operating the fund.
“The 28.4% decrease in our operating income overshadows the steady year-over-year performance of our trucking/logistics segment and the excellent performance of the business units in production services and specialized services,” added Lockwood.
“On the trucking/logistics side, this segment experienced overall growth in operating income due to the addition of Kleysen (Transport) and E.K. (Trucking Ltd.) and the steady performance of the other business units despite a slowdown in the overall economy, especially in Eastern Canada.”
Net income for the period was $16.6 million, a decrease of $22.3 million or 57.3% compared to the same period last year.
This decrease reflects the weak operating performance of the business units reliant on drilling activity in Western Canada and the lower future income tax recovery which reduced net income by $14.5 million, company officials said.
“As we look ahead to the remainder of the year we are comfortable with the operating models that exist in most of our business units,” noted Lockwood. “We will continue to focus substantial time and effort to ensure that all our business units are able to operate profitably in all economic environments.”
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