OKOTOKS, AB, Oct. 26, 2011 /PRNewswire/ - (TSX:MTL) Mullen Group Ltd. ("Mullen Group" and/or the "Corporation") is pleased to report its financial and operating results for the period ended September 30, 2011, with comparisons to the same period last year. Effective January 1, 2011, the Corporation commenced reporting its financial operating results in accordance with International Financial Reporting Standards ("IFRS"), which requires the restatement of its prior year results for comparative purposes.
Mullen Group generated third quarter consolidated revenue and operating income of $359.7 million and $81.1 million, respectively. The consolidated revenue of $359.7 million was an increase of $91.0 million, or 33.9 percent, from the $268.7 million generated in 2010. This increase in consolidated revenue was attributable to greater revenue generated by both the Oilfield Services segment and the Trucking/Logistics segment.
Revenue gains were strongest in the Oilfield Services segment as most operating entities benefited from improved industry conditions, including: improved drilling activity in western Canada in the current quarter as compared to the prior year; activity related to oil sands development and infrastructure projects remained robust; and the demand for fluid hauling and related production services benefited from a combination of strong crude oil drilling, pipeline capacity issues as well as pipeline shutdowns. In addition, the Trucking/Logistics segment experienced improved revenue which can be attributed to: virtually all operating entities in this segment recording increased revenue; incremental revenue from acquisitions; and fuel surcharge revenue related to higher diesel fuel prices.
Mullen Group's operating income of $81.1 million was an increase of $26.6 million, or 48.8 percent, over the $54.5 million generated in 2010. Operating income in the Oilfield Services segment accounted for $18.9 million of the increase while the Trucking/Logistics segment added an additional $7.2 million. Corporate Office costs declined $0.5 million on a year over year basis.
"In the third quarter, almost all Mullen Group operating entities performed at near optimum capacity. Our Oilfield Services segment continued to benefit from increased drilling activity, particularly in Alberta and Saskatchewan where our customer's drilling programs focused on crude oil and liquids rich gas plays. In addition, our businesses focused on oil sands and infrastructure development, along with well servicing and fluid hauling services, were well positioned to realize on enhanced activity levels in their respective markets. Our Trucking/Logistics segment also performed very well in the quarter. Of particular note is Hi-Way 9 and how well they have transitioned from a private company to being an integral part of our network of transportation solutions to our customers," stated Mr. Stephen H. Lockwood, President and Co-Chief Executive Officer. "However, despite our record performance in this third quarter, we do know that risks remain in the greater economy and with commodity prices in general, as we were all witness to the extreme volatility in the markets during the quarter. As such, our focus will remain on operational efficiency," added Mr. Lockwood.
In the third quarter of 2011, Mullen Group generated net income of $11.3 million, or $0.14 per share, a decrease of $17.1 million compared to the $28.4 million, or $0.36 per share in 2010. The $17.1 million decrease in net income was entirely attributable to non-operating items, including the $26.8 million year over year variance in unrealized foreign exchange and a $15.0 million year over year variance in the fair value of investments. These items were somewhat offset by Mullen Group's strong operating performance, which contributed an additional $26.6 million of operating income. Adjusting Mullen Group's net income and earnings per share to eliminate the impact of unrealized foreign exchange and changes in fair value of investments resulted in adjusted net income of $37.5 million and adjusted earnings per share of $0.47 for 2011 compared to $17.8 million, or $0.23 per share, in 2010. These adjustments more clearly reflect earnings from an operating perspective.
For the nine month period ended September 30, 2011, consolidated revenue increased by 33.7 percent to $993.2 million from $743.0 million. Operating income increased to $204.2 million, up 42.3 percent, from $143.5 million in 2010. Net income increased to $71.9 million, up 56.3 percent, from $46.0 million in 2010.
A summary of Mullen Group's results for the three and nine month periods ended September 30, 2011, along with revenue and operating results by segment are as follows:
|SUMMARY||Three month period ended September 30||Nine month period ended September 30|
|(unaudited) ($ millions, except per share amounts)|
|Net Income - adjusted(2)||37.5||17.8||110.7||86.6||39.2||120.9|
|Earnings per share(3)||$0.14||$0.36||(61.1)||$0.90||$0.58||55.2|
|Earnings per share - adjusted(2)||$0.47||$0.23||104.3||$1.09||$0.49||122.4|
|Net cash from operations||50.7||20.8||143.8||149.8||76.6||95.6|
|Net cash from operations per share(3)||$0.63||$0.26||142.3||$1.88||$0.96||95.8|
|Cash dividends declared per Common Share||$0.25||$0.125||100.0||$0.75||$0.375||100.0|
|(1)||Operating income is defined as net income before depreciation on property, plant and equipment, amortization on intangible assets, finance costs, unrealized foreign exchange gains and losses, other (income) expense and income taxes.|
|(2)||Net income - adjusted and earnings per share - adjusted are calculated by adjusting net income and basic earnings per share by the amount of any unrealized foreign exchange gains and losses and the change in fair value of investments.|
|(3)||Earnings per share and net cash from operations per share are calculated based on the weighted average number of Common Shares outstanding for the period.|
|Operating income, net income - adjusted and earnings per share - adjusted are not recognized terms under IFRS and do not have standardized meanings prescribed by IFRS. Management believes these measures are useful supplemental measures. Investors should be cautioned that these indicators should not replace net income as an indicator of performance.|
|SEGMENTED RESULTS||Three month period ended September 30||Nine month period ended September 30|
|(unaudited) ($ millions, except per share amounts)|
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.