OKOTOKS, AB, April 24, 2013 /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, 2013, with comparisons to the
same period last year.
For the three month period ended March 31, 2013, Mullen Group generated
consolidated revenue of $385.5 million and operating income of $87.8
million. Mullen Group generated net cash from operating activities of $17.4
million that was used, together with cash from other sources, to pay dividends
of $39.5 million, acquire net property, plant and equipment of $13.7 million
and pay interest obligations of $3.7 million.
Mullen Group's consolidated revenue of $385.5 million was a decrease of $40.5
million or 9.5 percent from the $426.0 million generated in 2012. The
decrease in consolidated revenue was largely attributable to a $39.0 million
decline in revenue experienced by the Oilfield Services segment, of which
$21.8 million related to the non-recurring revenue generated by the design,
build and commissioning of the Thin Fine Tailings ("TFT") barge system project
for a large oil sands operator which was completed in the second quarter of
2012, along with a marginal $1.5 million decline in revenue recorded by the
Trucking/Logistics segment. When factoring out the non-recurring TFT barge
system project revenue, Mullen's core business revenue was down $18.7 million,
or 4.6 percent.
The Oilfield Services segment contributed revenue of $257.6 million, a
decrease of $39.0 million, or 13.1 percent, from the $296.6 million generated
in the prior year period. As previously noted, the majority of the decrease in
revenue occurred in Canadian Dewatering L.P., which generated $21.8 million
less revenue as a result of the completion of the non-recurring TFT barge
system project. In addition, reduced demand for services by those Operating
Entities involved in the transportation of fluids and well servicing, and the
reduced demand for rig relocation services contributed to the decline in
revenue. These decreases were partially offset by increased revenue recorded
by those Operating Entities servicing the pipeline construction industry along
with core drilling. The Trucking/Logistics segment contributed revenue of
$129.1 million, which was a marginal decrease of $1.5 million over the prior
year period. This decrease was mainly attributable to decreased demand for
over-dimensional and heavy haul freight services.
Mullen Group generated operating income for the period ended March 31, 2013,
of $87.8 million, a decrease of $11.3 million or 11.4 percent over the $99.1
million generated in 2012. The decrease in operating income was mainly
attributable to the Oilfield Services segment, particularly by those Operating
Entities providing fluid hauling and well servicing along with those tied to
drilling activity. In addition, the Trucking/Logistics segment recorded a $1.9
million decrease in operating income which was generally attributable to those
Operating Entities providing over-dimensional and multi-modal transportation
services. As a percentage of consolidated revenue, operating income decreased
slightly to 22.7 percent as compared to 23.3 percent in 2012.
"We knew coming into this quarter that it would be difficult to top the first
quarter of 2012, which was a record in terms of revenue and operating
income. Specifically, the completion of the TFT barge system project in the
second quarter of 2012 along with the expectation of reduced drilling activity
were both known going into the quarter. However, some extreme weather
conditions in western Canada combined with bottlenecks in takeaway capacity
with some of our customers in the heavy oil plays of Alberta were situations
that we had little control over. As well, we witnessed some competitive
pressures in businesses tied to the servicing of wells as a result of
decreased drilling and completion activity in western Canada. On a positive
note, a number of pipeline construction projects kicked off in the quarter
which directly benefited Premay Pipeline Hauling L.P. and should for the
foreseeable future, while Treo Drilling Services L.P. once again performed
very well recording improvements both in terms of productivity and safety
performance. All-in-all our results met our expectations," stated Mr. Stephen
H. Lockwood, President and Co-Chief Executive Officer.
In the first quarter of 2013, Mullen Group generated net income of $44.4
million, or $0.50 per share, a decrease of $14.4 million, or 24.5 percent
compared to $58.8 million, or $0.73 per share in 2012. The $14.4 million
decrease in net income was mainly attributable to the $11.3 million decrease
in operating income and a $9.6 million negative variance in unrealized foreign
exchange. These decreases were somewhat offset by a $3.5 million positive
variance in the fair value of investments and a $3.1 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
the fair value of investments during the first quarter of 2013 results in
adjusted net income of $45.4 million and adjusted earnings per share of $0.52,
as compared to $54.0 million and $0.67 per share in 2012, respectively.
These adjustments more clearly reflect earnings from an operating perspective.
A summary of Mullen Group's results for the three month periods ended March
31,2013, and 2012, along with revenue and operating results by segment are
(unaudited) Three month periods ended
($ millions, except per share amounts) March 31
2013 2012 Change
$ $ %
Revenue 385.5 426.0 (9.5)
Operating income((1)) 87.8 99.1 (11.4)
Unrealized foreign exchange loss (gain) 5.0 (4.6) (208.7)
Decrease (increase) in fair value of (4.5) (1.0) 350.0
Net income 44.4 58.8 (24.5)
Net Income - adjusted((2)) 45.4 54.0 (15.9)
Earnings per share((3)) 0.50 0.73 (31.5)
Earnings per share - adjusted((2)) 0.52 0.67 (22.4)
Net cash from operating activities 17.4 54.3 (68.0)
Net cash from operating activities per share( 0.20 0.67 (70.1)
Cash dividends declared per Common Share 0.30 0.25 20.0
(1) Operating income is defined as net income before depreciation on
property, plant and equipment, amortization on intangible assets,
finance costs, unrealized foreign exchange gains and losses, other
(income) expense and income tax expense.
(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
by the change in fair value of investments.
(3) Earnings per share and net cash from operating activities per
share are calculated based on the basic 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 Canadian GAAP and do not
have standardized meanings prescribed by Canadian GAAP.
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 indicators
Three month periods ended
($ millions) 2013 2012 Change
$ $ %
Oilfield Services 257.6 296.6 (13.1)
Trucking/Logistics 129.1 130.6 (1.1)
Corporate 0.1 - -
Oilfield Services (0.5) (0.2) -
Trucking/Logistics (0.8) (1.0) -
Total 385.5 426.0 (9.5)
Oilfield Services 68.6 77.3 (11.3)
Trucking/Logistics 20.1 22.0 (8.6)
Corporate (0.9) (0.2) -
Total 87.8 99.1 (11.4)
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
Mullen Group is a company that owns a network of independently operated
businesses. Today the Mullen Group is recognized as the largest provider of
specialized transportation and related services to the oil and natural gas
industry in western Canada and as 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 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.
Mr. Murray K. Mullen - Chairman of the Board and Chief Executive Officer Mr.
Stephen H. Lockwood - Co-Chief Executive Officer and President Mr. P. Stephen
Clark - Chief Financial Officer
121A - 31 Southridge Drive Okotoks, Alberta, Canada T1S 2N3 Telephone:
403-995-5200 Fax: 403-995-5296
SOURCE: Mullen Group Ltd.
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