Mullen Group’s (TSX:MTL) trucking and logistics business set first quarter records as the Canadian firm reported earnings on April 24.
The Alberta-based Mullen reported a 14 percent increase in net income to C$10.6 million (a Canadian dollar equals US$0.74) on C$319.6 million of revenue, a 9.4 percent increase. Its adjusted earnings per share of C$0.10 was slightly below analysts estimate of C$0.12.
“I cannot say I was pleased with first-quarter results,” CEO Murray Mullen told analysts during a conference call on April 25. But he added that the numbers were decent “given the stagnant economy in Canada.”
Operating income from Mullen’s trucking and logistics segment increased by 16.7 percent during the first quarter of 2019, hitting C$30.1 million on revenue of C$215.2 million – both of which set first quarter records.
The trucking and logistics growth largely came from acquisitions made during 2018. Mullen said while the freight market had been soft at the beginning of the year, he is “not as concerned today as I was a few months back.”
Mullen said he expected to see new organic growth in trucking by the end of the year.
Mullen said the company would continue looking for acquisition opportunities within Canada. All of the firm’s 14 transportation and logistics units are based in Canada. Mullen said he would be hesitant to make any moves in the U.S. until the economy “plays itself out.”
“I’m not giving up on Canada,” he said.
Strength in transportation helped give Mullen momentum as its attempts to turn around its oil services business amid the struggles in western Canada’s energy sector. The company took a C$100 million impairment in the fourth quarter of 2018 in its oil services business.
Nevertheless, Mullen’s oil services segment showed signs of life. Net income increased by 28.8 percent, reaching $C16.1 million on $C105 million of revenue during the first quarter, compared to the first quarter of 2018.