Mining & Metals
Mullen Group Says Acquisitions Drove Q1 Growth; Adds "Growing Evidence" Freight Recession Near Needed Inflection Point
Mullen Group (MTL.TO), in the transportation and logistics industries, reported Thursday mixed earnings for the first quarter, but said "the year is off to a good start" as acquisitions are "continuing to drive revenue growth" and added in March "there was growing evidence that the long-awaited freight recession was near the needed inflection point".The company's first-quarter net income was C$21 million, or $0.22 per share basic and diluted, compared to $17.7 million, or $0.20 per share in the corresponding year-ago quarter. It met the consensus forecast at FactSet.For the first quarter, Mullen's adjusted EPS was $0.20 per share, compared with $0.21 per share in the corresponding year-ago quarter.The company's revenue in the first quarter was $547.7 million, compared to $497.1 million in the year-ago quarter. Consensus forecast for sales at FactSet was $544.2 million."The year is off to a good start for our organization with acquisitions continuing to drive revenue growth in the quarter," said Murray Mullen, Chair and Senior Executive Officer. "More importantly, we have added quality companies to our network of independently managed Business Units, a foundation of our acquisition strategy. In addition, the general market conditions showed signs of improving, with demand holding steady and a tightening in supply in several sectors of the trucking and logistics industry. This was evident in the month of March, one of the best months we have seen in a while.""We all know one month is not a trend, but in March there was growing evidence that the long-awaited freight recession was near the needed inflection point," added Mullen. "Demand was solid and supply was tightening. Under this scenario, if it continues, pricing will improve. In saying this we know there are risks on the demand side given the recent increase in fuel prices, which could delay the economic recovery, meaning we must monitor the events very closely. The "Nation Building" narrative is also a positive and from our viewpoint it is only a matter of time as to when these needed projects commence. These projects are all capital intensive and will require a significant logistics component. We will be well positioned to capitalize on the opportunities when they arrive. Until they do, acquisitions will continue to drive growth at Mullen Group."Shares in MTL closed down $0.06 or 0.33% on Wednesday.
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