Revenue drops in 2009 for former income trusts

OKOTOKS, Alta. — Revenue for a trio of Canadian carriers dropped in 2009 from 2008, but executives at Mullen, TransForce and Contrans are keeping a positive outlook for 2010.

At the end of 2009, Mullen Group’s generated consolidated revenue for the year was $978 million and operating income was $191.6 million. The revenue was a decrease of $336.2 million (25.6 percent) from the $1.3 billion generated in 2008. The drop in operating income was a decrease of $81.7 million (29.9 percent) from the $273.3 million generated in 2008.

According to the company, the decreases were a result of lower revenues generated by both the Trucking/Logistics segment and the Oilfield Services segment.

In 2009, Mullen generated net income of $90.8 million or $1.13 per share, a decrease of $22.2 million compared to $113.0 million or $1.40 per share in 2008.

"As the global economy recovers, we fully expect both segments in our business to benefit. For example, oil and natural gas drilling activity in western Canada is improving from multi-year lows. Investment in long-life capital projects like the oilsands is returning. These are just a couple of examples that indicate the worst is behind us," said Murray Mullen, chairman and co-CEO.

TRANSFORCE

TransForce’s total revenue for 2009 decreased by 18 percent to $1.8 billion from $2.3 billion in 2008. Excluding fuel surcharges, revenue decreased 13 percent to $1.7 billion from $2 billion in the previous year.

TransForce reduced its operating expenses and fixed costs, general and administrative expenses by the same percentage as its revenue declined. The company cut these costs by 18 percent to $1.6 billion for 2009 from $2 billion a year earlier.

EBITDA (earnings before interest, taxes, depreciation and amortization, and equivalent to operating income on TransForce’s financial statements) for 2009 was $226.5 million, a 19 percent decrease from $280 million in 2008.

"While some of our businesses are growing, such as the Matrec waste management operation, and others stayed stable, such as ICS and Canpar in the Package and Courier segment, for most of the company, volumes remain low in every part of the country,” stated Alain Bédard, chairman, president and CEO of TransForce.

"We have seen some signs of renewed activity but, overall, we expect the operating environment in 2010 to be only slightly better than 2009 with increases in the latter months. We are committed to our disciplined approach to managing costs now and when the economy recovers," he added.

CONTRANS

Revenue for Contrans in 2009 dropped to $373.6 million from $488.8 million in 2008. The EBITDA for the company ended up at $43.7 million in 2009, a drop from $52.1 million in 2008.

According to the company, year over year revenues and profit performance declined across all service lines compared to 2008.

"Staff cuts were necessary, wages were rolled back and the executive incentive program was eliminated for 2009. Fleet sizes were adjusted appropriately while discretionary and capital spending were scrutinized very closely,” stated Stan Dunford, chairman and CEO of Contrans.
 

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