OKOTOKS, AB,
April 24, 2014 /CNW/ -
(TSX:MTL) Mullen Group Ltd. ("Mullen Group" and/or the
"Corporation") is pleased to report its financial and
operating results for the period ended March
31, 2014, with comparisons to the same period last year.
For the three month period ended March 31, 2014, Mullen Group generated
consolidated revenue of $412.0 million, operating income of
$91.2 million and net cash from
operations of $35.1 million. During the quarter
Mullen Group incurred net capital expenditures of $13.3 million, paid dividends of $27.2 million and paid interest obligations of
$3.7 million.
Consolidated revenue in the first quarter
increased by $26.5 million, or 6.9
percent, to $412.0 million as
compared to $385.5 million in 2013.
The majority of this increase in revenue was directly attributable
to the Oilfield Services segment, which increased by $15.0 million, or 5.8 percent, to $272.6 million as compared to $257.6 million in the same period one year
earlier primarily due to increased demand for fluid hauling and
related production services as well as an increase in revenue
generated by those Operating Entities providing services associated
with large diameter pipeline construction projects. Revenue in the
Trucking/Logistics segment increased by $11.1 million, or 8.6 percent, to $140.2 million from $129.1
million in the same period one year earlier. This increase
was due to incremental revenue resulting from the acquisition of
Jay's Moving & Storage Ltd. ("Jay's") that contributed
$8.5 million of revenue, small
increases in most Operating Entities within this segment and a
$0.8 million increase in fuel
surcharge revenue.
Operating income for the first quarter increased
to $91.2 million, or 3.9 percent,
compared to $87.8 million in 2013.
The increase of $3.4 million was due
to a $1.3 million increase in the
Oilfield Services segment, a $1.0 million increase in the
Trucking/Logistics segment as well as a decrease in Corporate costs
of $1.1 million on a year over year
basis. Pricing remained competitive throughout the quarter and the
Operating Entities remained focused on cost control, however,
colder-than-normal temperatures during the quarter affected fuel
efficiency, impacted productivity and increased repairs and
maintenance expenses. As a percentage of consolidated revenue,
operating income decreased to 22.2 percent as compared to 22.7
percent in 2013.
In the first quarter of 2014, Mullen Group
generated net income of $36.3
million, or $0.40 per share, a
decrease of $8.1 million, or 18.2
percent compared to $44.4 million, or
$0.50 per share in 2013. The
$8.1 million decrease in net income
was mainly attributable to a $7.4
million negative variance in the fair value of investments
and a $4.8 million negative
variance in unrealized foreign exchange. These decreases were
somewhat offset by the $3.4 million
increase in operating income and a $0.9
million decrease in income tax expense. Adjusting Mullen
Group's net income and earnings per share to eliminate the impact
of unrealized foreign exchange and the change in fair value of
investments during the first quarter of 2014 resulted in adjusted
net income of $47.2 million and
adjusted earnings per share of $0.52,
as compared to $45.4 million and
$0.52 per share in 2013,
respectively. These adjustments more clearly reflect earnings from
an operating perspective.
"We are generally pleased with our operating
performance in the first quarter of 2014. We grew revenue by
$26.5 million despite the slow
growth economic environment and the lack of any real growth in
drilling activity in western Canada. The acquisition of Jay's and
market share gains by several of our Operating Entities, most
notably Premay Pipeline Hauling L.P., Heavy Crude Hauling L.P. and
E-Can Oilfield Services L.P., were the main drivers of the revenue
growth. Operating income while up slightly, were negatively
impacted by challenges faced by the extreme weather conditions
during the quarter. Productivity levels were certainly impacted as
was fuel efficiency, repairs and maintenance, costs we believe will
normalize as the year progresses. Overall we are not
disappointed with our first quarter results," said Mr. Murray K. Mullen, Chairman and Chief Executive
Officer.
A summary of Mullen Group's results for the
three month periods ended March 31,
2014 and 2013, along with revenue and operating results by
segment are as follows:
| |
| SUMMARY
|
(unaudited)
($ millions, except per share amounts) |
Three month periods ended March 31 |
| 2014 |
2013 |
Change |
| |
$ |
$ |
% |
| Revenue |
412.0 |
385.5 |
6.9 |
| |
|
|
|
| Operating income(1) |
91.2 |
87.8 |
3.9 |
| Unrealized foreign exchange loss |
9.8 |
5.0 |
96.0 |
| Decrease (increase) in fair value of
investments |
2.9 |
(4.5) |
(164.4) |
| Net income |
36.3 |
44.4 |
(18.2) |
| Net Income - adjusted(2) |
47.2 |
45.4 |
4.0 |
| Earnings per share(3) |
0.40 |
0.50 |
(20.0) |
| Earnings per share - adjusted(2) |
0.52 |
0.52 |
- |
| Net cash from operating activities |
35.1 |
17.4 |
101.7 |
| Net cash from operating activities per
share(3) |
0.39 |
0.20 |
95.0 |
| Cash dividends declared per Common Share |
0.30 |
0.30 |
- |
Notes:
(1) Operating income is defined as net income before
depreciation of property, plant and equipment, amortization of
intangible assets, finance costs, unrealized foreign exchange gains
and losses, other (income) expense and income taxes.
(2) Net income - adjusted and earnings per share - adjusted
are calculated by adjusting net income and basic earnings per share
by the amount of any unrealized foreign exchange gains and losses
and the change in fair value of investments.
(3) Earnings per share and net cash from operating
activities per share are calculated based on the weighted average
number of Common Shares outstanding for the period.
Operating income, net income - adjusted and earnings per share -
adjusted are not recognized terms under IFRS and do not have
standardized meanings prescribed by IFRS. Management believes
these measures are useful supplemental measures. Investors
should be cautioned that these indicators should not replace net
income and earnings per share as an indicator of
performance. |
| |
|
|
|
| SEGMENTED RESULTS |
|
(unaudited)
($ millions) |
Three month periods ended March 31 |
| 2014 |
2013 |
Change |
| |
$ |
$ |
% |
| Revenue |
|
|
|
| Oilfield Services |
272.6 |
257.6 |
5.8 |
| Trucking/Logistics |
140.2 |
129.1 |
8.6 |
| Corporate |
0.3 |
0.1 |
- |
| Intersegment eliminations |
|
|
|
| Oilfield Services |
- |
(0.5) |
- |
| Trucking/Logistics |
(1.1) |
(0.8) |
- |
| Total |
412.0 |
385.5 |
6.9 |
| Operating Income |
|
|
|
| Oilfield Services |
69.9 |
68.6 |
1.9 |
| Trucking/Logistics |
21.1 |
20.1 |
5.0 |
| Corporate |
0.2 |
(0.9) |
- |
| Total |
91.2 |
87.8 |
3.9 |
This news release may contain forward-looking
statements that are subject to risk factors associated with the oil
and natural gas business and the overall economy. Mullen
Group believes that the expectations reflected in this news release
are reasonable, but results may be affected by a variety of
variables. Mullen Group relies on litigation protection for
"forward-looking" statements.
Mullen Group is a company that owns a network
of independently operated businesses. Mullen Group provides a
wide range of specialized transportation and related services to
the oil and natural gas industry in western Canada and is one of the leading suppliers of
trucking and logistics services in Canada - two sectors of the economy in which
Mullen Group has strong business relationships and industry
leadership. Mullen Group provides management and financial
expertise, technology and systems support, shared services and
strategic planning to its independent businesses.
Mullen Group is a publicly traded corporation
listed on the Toronto Stock
Exchange under the symbol "MTL". Additional
information is available on our website at www.mullen-group.com or
on SEDAR at www.sedar.com.
SOURCE Mullen Group Ltd.