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Mullen reports fourth quarter results

ALDERSYDE, Alta. -- Mullen Transportation is still feeling the effects of a slowdown of oil and gas drilling in Wes...

ALDERSYDE, Alta. — Mullen Transportation is still feeling the effects of a slowdown of oil and gas drilling in Western Canada, but the company was still able to record an increase in Q4 revenue.

Mullen reported consolidated revenues of $84.5 million in the fourth quarter of 2002, which is an increase of seven per cent over the same period of 2001. Mullen’s numerous acquisitions over the fourth quarter attributed to the increase in revenue, the company reports.

The trucking segment of Mullen Transportation was hit hard in the fourth quarter, with the Eastern Canadian Mill Creek scaling back its operations in unprofitable lanes. That contributed to a 9.8 per cent decline in segment revenues.

Perhaps the biggest changes, however, were evident in the company’s overall operating income (down 21.1 per cent) and net income (down 31.3 per cent). The declines are attributed to the competitive market for services in the oilfield services segment of Mullen’s operations.

“Our results reflect the obvious – 2002 was a very challenging year. The oil and gas industry curtailed capital investment, reduced their drilling programs and generally spent less. And when your customers reduce their overall spending by some 20 per cent you will be impacted. We experienced a corresponding decline in utilization rates and an ever greater erosion in pricing power,” says Murray Mullen, chairman, president and chief executive officer of Mullen Transportation.

Mullen predicts a stronger 2003, as the oil and gas industry is predicting an increased cash flow thanks to high oil and gas prices. Mullen expects to see oil and gas companies re-investing a significant amount of the increased cash flow, stimulating more activity in Western Canada’s oilfields.

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