Mullen Posts Increased Q1 Earnings on Declining Revenue
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Mullen Group nearly tripled its earnings but saw revenue decline in the first quarter as growth was hindered by Canada’s slow recovery from the COVID-19 pandemic.
The Okotoks, Alberta-based company said first-quarter net income rose 176.6% to C$13 million from C$4.7 million in the same quarter of 2020. Diluted earnings per share rose to 12 Canadian cents from 9 cents.
Revenue declined by 8.7% to C$290.5 million from C$318.2 million in the first quarter of the previous year.
Mullen
“[The pandemic remains] the major impediment to a return to economic growth in Canada,” CEO Murray Mullen said in an April 21 news release.
“Government-mandated business closures, disruptions to the supply chain, as well as multiple examples of manufacturing capacities being curtailed had a negative impact on freight demand, and our revenues, particularly during the first two months of the year,” he said.
Mullen said other countries that were more aggressive in addressing how the virus spread and securing vaccines had experienced a sharp rebound in economic activity.
“Until this situation is rectified, it is difficult to see any recovery in the Canadian economy,” Mullen said.
Nonetheless, Mullen has continued to make strategic acquisitions that will accelerate the motor carrier’s growth, he said.
Mullen on April 16 signed an agreement to acquire the Bandstra Group of Cos. The transaction includes Bandstra Transportation Systems and Babine Truck & Equipment Ltd. The company and its subsidiaries are based in British Columbia. It also signed a deal to acquire APPS Transport Group of Ontario.
“[Both] are brand names easily recognizable in the Canadian transportation industry,” Mullen said. “These are precisely the type of companies we have waited to come to market, reinforcing our patient approach to acquisitions.”
In the first quarter, the motor carrier’s less-than-truckload business was its best performing segment, helped by the e-commerce boom.
Revenue in the less-than-truckload business segment rose 6.9% to C$120.7 million in the quarter. The segment’s operating income before depreciation and amortization, or OIBDA, jumped 45.1% to C$19.3 million.
Revenue in Mullen’s logistics and warehousing segment dipped 5.1% to C$91.3 million from the same period a year earlier. OIBDA fell 3% to C$15.9 million.
The company’s specialized and industrial services segment experienced a 28.8% revenue decline to C$79.3 million. OIBDA fell 13.8% to C$15 million. A slump in Canada’s oil patch has hurt the segment’s performance.
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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