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Optimism returning to oil and gas industry: Mullen
well as reinforcing our acquisition strategy,” Mullen said.
“I remain of the view that the mar- kets we serve are fragile and that a period of adjustment is still required before our financial performance improves in a more meaningful way but there is a sense of optimism returning to the oil and natural gas industry, which I fully expect will benefit our organization in the sec- ond half of the year. In terms of the overall Canadian economy, the story is very similar. Freight demand is starting to increase, which will ultimately lead to improved pric- ing later this year. In the meantime, however, the trucking and logis- tics sector of the economy remains very competitive.”
Mullen said the company contin- ues to be on the lookout for acquisi- tion opportunities.
“One of our stated strategic initiatives for 2017 centered on growth through acquisitions. In this latest quarter we closed two transactions, the most notable being the acquisition of Envolve Energy Services Corp., opening up a new growth platform for Mullen Group,” said Mullen.
“For the balance of the year we will continue to identify new opportunities that we can benefit from for many years. In addition, we are announcing an increase of $25 million to our 2017 capital expenditure budget in anticipation of a recovery in the energy sector. This is exactly why we took the necessary steps to strengthen our balance sheet in 2016. We are uniquely posi- tioned to proactively pursue opportunities.” TN
TFI International
earnings weighed
by sluggish US
truckload market
MONTREAL, QUEBEC
TFI International saw earnings weighed down by continuing dif- ficulties in the overall US truckload market as well as integration costs related to its CFI acquisition.
The company reported Q1 revenue of $1.06 billion, a 22% increase excluding fuel sur- charges. Net income from con- tinuing operations was $14.1 mil- lion, down from $15.3 million in the first quarter of 2016.
“As anticipated, TFI Interna- tional’s first quarter results were affected by difficult conditions in the US truckload market and cer- tain integration costs related to the CFI acquisition. This overshadowed significant profitability increases in all other business segments, reflect- ing our commitment to improve efficiency and to focus on niches generating superior returns,” said Alain Bedard, chairman, presi- dent and chief executive officer of TFI International.
Bedard said the company remains “cautiously optimistic” about the North American econ- omy, given low unemployment and healthy consumer spending.
“We are also seeing a modest rebound in the level of investment in the energy sector,” Bedard said. “These factors should, over time, improve market conditions, but we do not expect any significant improvement before the end of 2017. TFI International will also continue to execute its selec- tive acquisition strategy, target- ing profitable and well-managed companies that offer synergies, reinforce existing operations, and further expand its geographic footprint.” TN
By James Menzies
OKOTOKS, ALBERTA
Mullen Group reported improved revenue in the first quarter of 2017 in both its trucking/logis- tics and oilfield services segments, but the markets remain “fragile,” according to chairman and CEO Murray Mullen.
The company posted Q1 revenue of $284.9 million, up 4.9% year-over- year. The trucking segment grew revenue 4% while oilfield services saw revenue climb 4.8%. Drilling activity improved but Mullen saw a decline in pipeline hauling demand.
Net income was $14.5 million, down 32.2% year-over-year, pri- marily due to a negative variance in unrealized foreign exchange. Nonetheless, Mullen said he’s see- ing optimism returning to the oil and gas segment.
“After two years of reporting declining revenues we are finally starting to experience some growth. The $285 million generated in the first quarter of 2017 remains well below prior peak levels but the results are 4.9% above last year, rep- resenting that some early stage sta- bility is returning to the battered oil and natural gas service industry as
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24 Truck News • June 2017