Mullen Group Posts Increased Earnings in Q4; Revenue Continues to Slide
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Mullen Group reported a gain in profit for the fourth quarter although revenue continues to fall because of the COVID-19 pandemic.
The Okotoks, Alberta-based company said fourth-quarter net income rose 20.2% to C$10.1 million from C$8.4 million in the same quarter of 2019. Diluted earnings per share rose to 10 Canadian cents from 8 cents.
Revenue declined by 5.4% to C$297.7 million from C$314.6 million in the fourth quarter of the previous year.
For all of 2020, Mullen reported net income fell 11.4% to C$64 million from C$72.2 million in 2019. Revenue slipped 8.9% to C$1.2 billion from C$1.3 billion.
CEO Murray Mullen called the results “acceptable” considering the economic and disruptive conditions created by the pandemic.
The motor carrier’s diversified service and geographic business model has helped it navigate a difficult year, he said in a Feb. 10 news release.
“Business has been interrupted with some sectors of the economy bearing the brunt of the government-mandated closures,” Mullen said. “The supply chain has been tested to the limit due to bottlenecks, constraints and changes in consumer buying habits, the most notable being an explosion in E-Commerce transactions.”
He added that the economic environment also presents opportunities.
Mullen
“We will keep one eye open for a good acquisition, one that makes financial sense and can provide a future platform for growth,” Mullen said.
The company reported mixed operating results for the quarter.
Revenue in the less-than-truckload business segment rose 1.8% to C$116.3 million. The gain came from incremental revenue generated from the acquisition of Pacific Coast Express Ltd. and consumer demand created by the pandemic. But the increase partially was offset by a C$3.1 million decline in fuel surcharge revenue.
The segment’s operating income before depreciation and amortization, or OIBDA, rose 12.6% to C$18.8 million. The improvement came from lower fuel costs, incremental income generated by Pacific Coast Express and Canada’s emergency wage subsidy program.
Revenue in Mullen’s logistics and warehousing segment fell 5.3% to C$96.8 million. The pandemic and subsequent government restrictions that closed factories decreased Mullen’s freight volumes and spot pricing, the company said.
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The segment’s OIBDA rose 2.6% to C$20 million, helped by the performance of the company’s DWS Logistics Inc. and International Warehousing & Distribution Inc. units. The wage subsidy program also contributed to the gain.
Revenue for the specialized and industrial services segment fell 15.2% to C$84.8 million, primarily because of the slump in Canada’s oil patch. But OIBDA increased 5.4% to C$17.7 million, a result of greater demand for large diameter pipeline hauling and stringing services and the wage subsidies.
The company did not provide financial guidance for this year.
“While we are hopeful that this virus can be brought under control sooner rather than later, along with a return to something we can say is normal, the truth is no one knows for sure,” Mullen said.
Mullen Group ranks No. 54 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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