OKOTOKS, Alta. – Mullen Group’s trucking and logistics segment grew marginally in the three months leading to June 30, despite “headwinds” linked to a sluggish economy and soft demand for truckload services.
The segment reported $219.6 million in incremental revenue, up 0.1% from the previous quarter. There was $2.6 million in incremental revenue from acquisitions, while fuel surcharge revenue dropped $0.2 million. The LTL revenue was up $400,000 because of slight revenue gains at Gardewine Group. Truckload revenue was up $200,000 due to $2.6 million of incremental revenue generated through acquisitions, somewhat offsetting the drop in demand for such services.
“From my vantage point it appears that consumer spending remains strong, which drives our less-than-truckload and final mile delivery business,” said Murray Mullen, chairman and CEO. “In contrast capital investment, in areas such as infrastructure and major projects, remains hampered by regulatory delays and a lack of investor conviction. This directly impacts our truckload and specialized business.”
The oil and natural gas business also continues to struggle in Western Canada because of low commodity prices and a lack of access to new markets, he said.
“It is under this scenario that only a well thought-out acquisition strategy can minimize the negative impacts of the industry slowdown. This is precisely what we did last year and why our oilfield services segment results improved year over year.”
Oilfield services were at $99.8 million, compared to $76.7 million during the quarter in 2018.
The company’s consolidated revenue reached $319 million, up $23.3 million from the same period in 2018.
“The reality is that there are times when markets simply do not grow. But we do not sit by idly and wait for better days,” Mullen said. “We adjust our priorities, focus on costs, find those elusive productivity improvements, and search for strategic acquisitions to generate growth.
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