Mullen Group Revenue Rises and Profits Fall in Q3
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Mullen Group Ltd. posted a record turnover but saw its profits decline in the third quarter.
The Okotoks, Alta.-Based company said third-quarter net income fell 33.2% to C $ 17.5 million, from C $ 26.2 million in the same quarter of 2020. Profit diluted per share fell to 19 cents Canadian, from 26 cents.
Revenue increased 48.7% to a record C $ 432.5 million, compared to C $ 290.9 million in the third quarter last year.
CEO Murray Mullen attributed much of the revenue gain to a series of acquisitions made by the carrier over the past year. They include QuadExpress, based in Naperville, Ill., As well as Tri Point Intermodal Services and APPS Transport Group, both based in Mississauga, Ontario.
“Not only have these quality companies contributed to our revenue growth, but they are operating in sectors of the economy that we consider to have the best growth potential,” Mullen said in an Oct. 27 press release.
RELATED: Mullen accelerates its acquisitions
“The economy is driven by consumer spending, but in today’s economy the trend has never been so obvious, which is precisely why we have invested significant capital to acquire companies that supply logistics solutions to this sector of the economy, ”he said.
Mullen, however, said the carrier’s results were still being held back by COVID-19 workplace restrictions in Canada and the “underinvestment in capital spending” there.
“This is one of the main reasons our flatbed haulage business as well as the majority of our specialty and industrial services business declined again this quarter,” he said.
Mullen’s Specialty and Industrial Services segment revenues decreased 7.3% to C $ 85.7 million as a result of reduced pipeline construction. Segment operating income before depreciation and amortization, a key measure of operating income, decreased 26.4% to C $ 15.6 million.
Mullen’s other business units posted gains.
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Revenues from its LTL segment increased 50% to C $ 169.1 million as it was a major beneficiary of the increase in consumer spending. Its operating profit measure rose 30% to C $ 26.9 million.
Logistics and warehousing revenues increased 41.4% to C $ 121.9 million. Mullen attributed the gain to greater demand for freight services. Its operating profit measure rose 47.4% to C $ 22.7 million.
The company’s new US and international logistics segment added C $ 57 million in revenue and $ 2.9 million in operating profit. This was the first reporting period for this segment.
Mullen said revenues were above expectations due to the strength in the US freight market.
The company’s consolidated operating income before depreciation and amortization increased 17.3% to C $ 64.4 million.
Mullen Group is ranked 60th on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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