Mullen Profits Grow Despite Lower Freight Volumes

Mullen Group MLN delivered a better-than-expected second quarter despite weaker freight volumes. 

The Canadian transportation and oil services firm reported that net income increased by 6.1 percent to C$15.5 million (the Canadian dollar equals US$0.76), while revenue increased by 7.9 percent to C$319 million, compared to the second quarter of 2018.  Mullen earned an adjusted C$0.15 per share, C$0.04 cents higher than analyst expectations.  

"All in all a very good quarter for our organization," CEO Murray Mullen said in a statement on July 24. 

Revenue from Mullen's trucking and logistics segment was relatively flat, increasing by 0.1 percent to C$219.6. But stronger performance yielded an 8.4 percent increase in operating income to C$36.2 million. 

"The Trucking/Logistics segment had another strong quarter despite the headwinds associated with the slow-growth Canadian economy along with a quarter of very soft demand for truckload services," Mullen said. "From my vantage point, it appears that consumer spending remains strong, which drives our less-than-truckload and final-mile delivery business."

Photo: Mullen Group

Revenue and profits also surged in Mullen's oil services segment. Operating income increased by 42 percent to C$16.9 million, while revenue jumped by 30.1 percent to C$99.8 million because of acquisitions in 2018. 

Mullen's trucking and logistics posted record revenue and profits when it reported first quarter earnings in April. 

Murray Mullen subsequently told analysts that the growth largely came from acquisitions, but that he expected organic growth to return in 2019.

Mullen also said the company would make trucking and logistics acquisitions in 2019. Mullen has purchased three firms since then.  

Mullen acquired two small British Columbia carriers in July, expanding its less-than-truckload and delivery business. In May, Mullen-owned carrier Kriska Transportation Group acquired Ontario brokerage Champion Express. 

Mullen holds a call with analysts tomorrow, July 25.

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