Fleet-buying sparks Mullen’s record 1Q revenue

ALDERSYDE, Alta. — A series of major fleet acquisitions and mergers have launched Mullen Group Income Fund high into the black in the first three month of 2006.

For the period ended March 31, 2006, Mullen generated record consolidated revenues of $245.9 million — an increase of $69.7 million or 40 percent over the same period in 2005 — and record operating income of $59.8 million, which was a 36 percent boost over the same period last year.

Net income for the period was $43.1 million, an increase of $17.1 million or 66 percent compared to the same period last year.

Producers Oilfield is one of a several Mullen takeovers that
propelled the carrier into the #2 spot of Canada’s largest fleets

This increase, explains the company, was primarily attributable to the revenue generated by the addition of seven new business units which collectively added $64.3 million in revenue growth. The balance of the increase of $5.4 million was due to modest internal growth from business units owned and operated by Mullen for more than one year, the company added.

This modest growth in the balance was due Mullen’s oil and gas drilling units which were capacity constrained due to a combination of equipment shortages and the lack of skilled drivers. Secondly, one business unit, Heavy Crude Hauling L.P., experienced a significant loss of business due to pricing disagreements with certain oil and gas clients, Mullen reports.

“Acquisitions continue to be the cornerstone of our growth strategy,” said Stephen Lockwood, president and Co-CEO. “The economic climate in western Canada is so strong and the demand for skilled workers so high that we accelerated our acquisition strategy over the past year to ensure we could not only grow the Fund but also to meet the service demands of our loyal customer base, which continues to expand. Based upon what we know today and the continued strength in energy related commodities we expect this trend will continue.”

Lockwood commended Mullen staff across the board for “capitalizing on the demand for their services while maintaining a disciplined approach to safety.”

“We know the pressures they were under but safety is important to our organization not just profits. On the whole they did an outstanding job at finding the right balance during this hectic period. On the other hand, we know some of our business units can do better and we will be working closely with these businesses to improve on both fronts,” he said.

In December last year, Pe Ben Oilfield Services accepted a takeover offer from Mullen Group Income Fund after the Alberta trucking and oilfield giant agreed to amend the terms of a previously announced hostile takeover. That move came a few months after the major acquisition of 250-truck fleet Payne Transportation in Winnipeg for $1.5 million.

This past February, Mullen merged with a former subsidiary and oil field services powerhouse Producers Oilfield. Weeks later Mullen added three Alberta based drilling fleet to its portfolio.

Last month, Mullen became the country’s second-largest for-hire carrier with the purchase of Winnipeg family fleet Kleysen Transport.