Mullen Group Posts 0.1% Revenue Gain

(Mullen Group)

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Mullen Group experienced a slight increase in revenue year over year but a dip in earnings during the fourth quarter of 2024, the company reported Feb. 13.

The Okotoks, Alberta-based company posted net income of C$18.9 million, or 21 cents a diluted share, for the three months ending Dec. 31. That compared with C$29.4 million, or 32 cents, during the same time the previous year. Total revenue increased by 0.1% to C$499.1 million from C$498.6 million.

“Looking at our financial performance in the fourth quarter, in fact for the entire year, you might conclude that not much was happening at the Mullen Group last year,” said Murray Mullen, the company’s chairman and senior executive officer. “But that was not the case at all. It took a lot of hard work by everyone in our 40 business units and at the corporate office to mitigate the very challenging market conditions.”

Specifically, he stressed that the company’s ability to keep revenue flat while improving operating income before depreciation and amortization was an accomplishment amid demand softness, pricing pressures and undisciplined competition.

Going forward, he doesn’t expect the environment to get much better.

“From a demand perspective, I do not believe that 2025 will be any better than last year,” Mullen said. “The Canadian economy remains range-bound at best, with downside risks emerging due to the potential for trade disruptions between Canada and the U.S. When you couple trade disruptions along with the fact that Canada is lagging in terms of capital investment, the only conclusion that I come to is that the demand for freight services will continue to underwhelm. We will monitor these events carefully and will adapt our business as required. Thankfully, however, we maintain a very strong balance sheet and we have a diversified portfolio of business units, two competitive advantages during uncertain times.”

Amid these challenges, Mullen said he’s also open to expansion.

“There will undoubtedly be acquisition opportunities available for our review, but we will only pursue ones that add value to Mullen Group shareholders,” the company chairman said.

For Q4, less-than-truckload segment revenue fell 0.3% to C$189.4 million from C$190 million the previous year. The company attributed this to a decrease in fuel surcharge revenue that was offset by incremental revenue from acquisitions. Operating income before depreciation and amortization managed to increase 5% to C$31.4 million from C$29.9 million.

Logistics and warehousing segment revenue for Q4 increased 14.3% to C$160.9 million from C$140.8 million the prior year. The report noted that acquisitions added C$30.9 million of incremental revenue, which was somewhat offset by a lack of capital investment in Canada. The report also pointed to the softer freight and logistics environment, with suppliers and manufacturers continuing to remain reluctant to increase inventory levels from 2024. Operating income before depreciation and amortization increased 14.1% to C$33.2 million from C$29.1 million.

Specialized and industrial services segment revenue fell 15.3% to C$103.8 million from C$122.5 million during the quarter, primarily due to a C$11.1 million reduction in revenue for pipeline hauling and stringing services at Premay Pipeline Hauling. This shift was driven by the completion of the Trans Mountain Expansion Project and the Coastal GasLink Pipeline Project. Operating income before depreciation and amortization for Q4 fell 34.1% to C$16.2 million from C$24.6 million.

U.S. and international logistics segment revenue declined 0.4% to C$47.5 million from C$47.7 million. The company noted that in Q4 the third-party logistics industry experienced lower freight demand for full truckload shipments and lower pricing per shipment resulting from the ongoing competitive operating environment. Operating income before depreciation and amortization increased 175% to C$1.1 million from C$400,000.

For the full year, Mullen reported net income of C$112.3 million, C$1.23 a share, on revenue of C$1.99 billion, compared with net income of C$136.7 million, C$1.45, on revenue of C$1.99 billion in 2023.

Mullen Group ranks No. 47 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.