OKTOKS, AB – Mullen Group has established a $40 million capital budget for 2018, setting aside $30 million of that to replace trucks, trailers, and specialized equipment in the trucking and logistics segment.

The remaining $10 million will be used to begin replacing equipment in the oilfield services business, recognizing that the company has been “under-investing” in the segment in recent years.

“We will enter 2018 in good shape from a balance sheet perspective and what I would call a pretty stable outlook for both sectors of the economy we are focused on – namely the overall Canadian economy, the principal driver of our Trucking/Logistics segment, and the oil and gas industry,” said Murray K. Mullen, chairman and Chief Executive Officer.

“Given this backdrop we believe that 2018 will be sequentially better than 2017.  If the economy stays on its current trajectory; oil prices stay around current levels; and we get a little good news on the natural gas front; then we believe we could achieve gross revenue in excess of $1.2 billion and OIBDA in the $190- to $200-million range. This assumes no growth in the oilfield services sector.”

Trucking and logistics is projected to account for about 67% of Mullen Group revenue, exclusive of any acquisitions.

“While the current trucking/logistics market remains extremely competitive, our view is that these pressures will ease throughout 2018 as demand for freight services grows,” the company says in a related release. “The tightening of U.S. trucking capacity, as a result of continued economic expansion accompanied by the impact of the mandatory electronic log regulations, is setting the stage for a rebalancing of pricing for freight services in 2018. The Canadian economy is expected to continue to expand moderately year over year. 

“In addition, any further growth in the U.S. economy could provide additional demand for Canada’s exports, thereby positively affecting the demand for freight services. This, along with improving prospects for the Alberta economy, which until recently has been the major drag on the overall economy, should provide us with opportunities in 2018,” the company adds.

Mullen also continues to develop its Moveitonline load matching platform, which was updated in 2017 and onboarded 160 carriers with more than 12,000 trucks in the system.

Other priorities for the year include a focus on pursuing business acquisitions, increasing capital expenditures, and accelerating investments in technologies such as mobile apps.

Oilfield services are expected to account for 33% of the 2018 revenue, against a backdrop of improving crude values.

“In terms of new capital projects, including oil sands related development and the prospects of certain large diameter pipeline projects, there are signs of optimism,” Mullen Group observes. “Several projects such as Keystone XL and Trans Mountain have a very good chance of proceeding in 2018.” But it plans to remain cautious given that the timing of the work can’t be predicted.