April 30, 2017

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Mullen Group grows profits despite “pretty deep recession” in Alberta

OKOTOKS, Alta. — Mullen Group posted second quarter earnings that exceeded analyst expectations, even on shrinking trucking revenues.

Total revenue came in at $247 million, down 13.3% from last year’s Q2. The oilfield services segment saw revenue drop by $31.7 million while trucking/logistics saw a decline of $4.8 million. However, Mullen delivered earnings of 14 cents a share, well above analysts’ expectations.

“MTL reported a solid beat in Q2 with EBITDA of $47M,” Scotiabank wrote in a note to investors. “The major reason was solid expense control which led to better-than-expected margins in both segments. In our view, this was a strong showing considering that the macro environment remains weak.”

Mullen’s lower trucking revenue was attributed to lower fuel surcharges and slowing demand in Alberta. The trucking/logistic segment’s OIBDA was a record for the second quarter. Net income totaled $13.7 million, a 1,422.2% increase over last year when Mullen posted a profit of $0.9 million, or one cent per share.

“The markets we operate in today are very challenging, to say the least. The oil and gas industry struggles are well documented; the Province of Alberta is mired in what I describe as a pretty deep recession, exacerbated by one of the costliest natural disasters in Canadian history – the fires in Fort McMurray; and today, the Canadian economy is showing the strains associated with the lack of private investment in capital projects, an important element of any sustaining economy,” said Murray Mullen, CEO of Mullen Group.

“In spite of all these negatives we generated some impressive results this quarter, reflecting the diversity of our business model as well as the hard work and commitment to managing all aspects of our business by every single business unit in our organization. Our focus on quality, safety and use of technology allowed our organization to manage the workload efficiently as well as minimize costs, two critical aspects important to generating the best margins possible. From this perspective I am most pleased with our financial performance this quarter.”

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