OKOTOKS, AB – Mullen Group let go of some 1,000 employees after its first quarter profit plummeted in its oilfield services division as a result of low oil prices and inactivity.
CEO Murray Mullen told the Calgary Herald in a conference call that the job cuts are similar to those in the last significant downturn in 2009 and said the company will likely pay out about $1-million in severance.

The company generated consolidated revenue of $337.2 million, operating income of $64.8 million and net cash from operations of $41.9 million in 2015 Q1. It posted a net income of $2.8 million, down from $33.5 million over the same period in 2014; that’s a 92.3-percent drop year-to-year.

The decline was partially offset by an increase of 28.5 percent in the truckling/logistics segment, which posted a revenue of $180.1 million, thanks in part to Mullen’s acquisition of Gardewine and Bernard Transport.

Mullen commented: “It is during times like this that a diversified business model and strong balance sheet become a real advantage. Our previously announced acquisitions, the most significant being Gardewine – one of Canada’s largest trucking and logistics carriers – cushioned an otherwise very challenging quarter.”

“The real and negative impact of low crude oil and natural gas prices hit oilfield service providers, including Mullen Group, in the first quarter. Drilling programs were slashed, capital investment decisions were either delayed or cancelled and pricing pressures were intense, all factors which contributed to the significant declines in our Oilfield Services segment. But one of the real tragedies of this cyclical downturn is the impact on people, including here at Mullen Group,” he said.

Mullen Group gained about 1,500 employees with its acquisitions last year, bringing the head count to about 7,500, now 6,500 due to the cuts.

Mullen ranked the second largest for-hire Canadian carrier in Today’s Trucking Top 100 Fleet list in 2015.

“We fully expect that our future results will reflect the current trend,” Mullen said. “Oilfield services will remain under pressure until oil and natural gas prices recover and confidence in the future prospects for the oil and gas industry is restored. The timing of this recovery is uncertain, however, the recent increases in crude oil pricing is encouraging.”

He added that “until we see clear evidence of an industry recovery we will under invest in the oilfield services sector. However, there are a few areas of interest that we will pursue as opportunities arise. We have already invested in two new companies – Envolve Energy Services Corp. and Cordova Oilfield Services Ltd. – investing alongside quality entrepreneurs in areas we believe offer growth potential. And I fully expect that Mullen Group will make additional investments to support the growth of these companies.”

Mullen expects its Trucking/Logistics segment to be its most productive segment in 2015, “given the overall outlook for the Canadian economy and the acquisition of Gardewine.”