CALGARY, Alta. — Mullen Group Income Fund has reported revenue of $358.1 million (down 2.1% compared to last year) and operating income of $83.6 million (down 3.1%) for the three-month period ending March 31.

The company attributed the drop in revenue to a slowdown in oil and gas drilling activity, which impacted business units in this sector. However, the trucking and logistics segments reported a strong quarter, helping offset the oil and gas losses.

“We are pleased with the overall financial performance of our business units in the first quarter. The Drilling Related Services group experienced a significant decline in revenue as a result of lower demand for their services and reduced pricing. This decline was mitigated to a large extent by a strong performance from both our Trucking/Logistics segment and by those business units in our Oilfield Services segment leveraged to the transportation of fluids and the servicing of wells,” stated Stephen H. Lockwood, president and co-CEO.

The $3.1 million decline in operating income was blamed on rising fuel costs and other operating expenses. The decline could have been a lot worse, however, according to Lockwood. He said continued cost-cutting helped minimize the damages. He also said he is encouraged by the strong performance of Mullen’s trucking sector.

“In the trucking/logistics segment we saw a marked increase in the margin from 13.2% in 2007 to 14.9% in 2008, mainly due to a continued focus on controlling costs and increased freight volumes and pricing in specific markets in Western Canada,” said Lockwood.

The group also announced it would increase its capital expenditure budget by $20 million to allow for more internal growth in its business units.