OKOTOKS, AB – The trucking, logistics and oilfield services provider Mullen Group Ltd. managed to stay profitable in the third quarter of the year despite a big decline in the oil business, according to a new earnings report it released.
Net income fell 30.5 percent from the same time a year earlier to $7.3 million as total revenue posted a 14.7 percent decline, hitting $304.7 million due to an $88.8 million drop in revenue in its oilfield services segment but was offset by a $36.4 million increase in its trucking/logistics segment
Total operating income fell 14.5 percent to $65.5 million.
“The impact of significantly lower commodity prices negatively impacted industry cash flows reducing capital investment and drilling activity in western Canada,” the company said in a statement. “As a result virtually all operating entities within this [oilfield services] segment experienced revenue decreases.”
The segment revenue declined during the quarter by 42.1 percent to $122 million compared to last year.
“Specifically, the decrease was due to a reduction in revenue generated by those operating entities involved in the transportation of fluids and servicing of wells and from lower revenue generated by those operating entities most directly tied to oil and natural gas drilling activity in western Canada due to low customer demand, intense competition and pricing pressures,” Mullen said. “Revenue also decreased due to a reduction in demand for services related to dewatering services.”
Conversely, revenue in Mullen’s trucking/logistics segment increased to $183.1 million, which is the highest level of quarterly revenue ever attained by this segment, according to the company. The 24.8 percent increase in segment revenue was attributed to incremental revenue generated by the acquisition of Gardewine Group Limited Partnership and Bernard Transport Ltd. but was offset by the loss of revenue associated with the disposition of Mill Creek Motor Freight L.P.
“Our strategy of operating a diversified business model is certainly validated today. In one of the most challenging markets I have witnessed, our operating and financial performance is very respectable. It is from this perspective I am very pleased with our overall performance,” said Murray K. Mullen, chairman and CEO.
A more detailed breakdown of the company’s financial performance is on the Mullen Group website.
Have your say
We won't publish or share your data