Earnings fell in the first quarter for Canadian transportation and oilfield services company Mullen Group Income Fund.
Demand fell off significantly for oil and gas drilling activity in western Canada, the company said, bringing prices and revenue down. Transportation and logistics partly offset the decline to bring in overall revenue of $358.1 million in the first quarter, down 2.1 percent from a year ago. Net income for the quarter was $49.8 million, off 14.6 percent from last year.
In the Trucking/Logistics segment we saw a marked increase in the margin from 13.2 percent in 2007 to 14.9 percent in 2008, mainly due to a continued focus on controlling costs and increased freight volumes and pricing in specific markets in western Canada," said Stephen H. Lockwood, president and co-CEO.
Lockwood attributed the $8.5 million decline in net income to a $5.5 million unrealized foreign exchange loss recorded in 2008 compared to a $3 million unrealized foreign exchange gain in 2007.
The Fund also announced an increase in its 2008 capital expenditure budget from $40 million to $60 million to allow for additional internal growth in its business units.
"In both north-east British Columbia and Saskatchewan the economic environment is presenting many opportunities that our business units are anxious to pursue. In addition, we are becoming increasingly more optimistic about the prospects for 2009," said Lockwood.