In c8452, transmitted today at 17:30, an error occurred in the headline. "Mullen Group Ltd. Reports Record First Quarter Financial Results" should have read "Mullen Group Ltd. Reports First Quarter Financial Results." Full corrected copy follows:
Mullen Group Ltd. Reports First Quarter Financial Results
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 $0.67 per share in 2012, respectively. These adjustments more clearly reflect earnings from an operating perspective.
A summary of Mullen Group's results for the three month periods ended March 31, 2013, and 2012, along with revenue and operating results by segment are as follows:
| SUMMARY | ||||
| (unaudited) ($ millions, except per share amounts) |
Three month periods ended March 31 |
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| 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 investments | (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(3) | 0.20 | 0.67 | (70.1) | |
| Cash dividends declared per Common Share | 0.30 | 0.25 | 20.0 | |
| Notes: |
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| (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. |
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| (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. |
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| (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. |
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| 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 of performance. | ||||
| SEGMENTED RESULTS | ||||
| (unaudited) ($ millions) |
Three month periods ended March 31 |
|||
| 2013 | 2012 | Change | ||
| $ | $ | % | ||
| Revenue | ||||
| Oilfield Services | 257.6 | 296.6 | (13.1) | |
| Trucking/Logistics | 129.1 | 130.6 | (1.1) | |
| Corporate | 0.1 | - | - | |
| Intersegment eliminations | ||||
| Oilfield Services | (0.5) | (0.2) | - | |
| Trucking/Logistics | (0.8) | (1.0) | - | |
| Total | 385.5 | 426.0 | (9.5) | |
| Operating Income | ||||
| 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 "forward-looking" statements.
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.
SOURCE: Mullen Group Ltd.
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
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