Bullboard - Stock Discussion Forum Mullen Group Ltd. MLLGF

Primary Symbol: T.MTL Alternate Symbol(s): T.MTL.DB

Industrials Integrated Shipping & Logistics

Mullen Group is one of North America's largest logistics providers with a network of independently operated businesses provide a wide range of service offerings including less-than-truckload, truckload, warehousing, logistics, transload, oversized, third-party logistics & specialized hauling transportation. Mullen also provides a diverse set of specialized services related to the energy, mining... see more

TSX:MTL - Post Discussion

Mullen Group Ltd. > RBC

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Post by retiredcf on Oct 20, 2022 9:21am

RBC

Also potential here for them to increase their target. GLTA

October 20, 2022

Mullen Group Ltd.
MTL reports record results, expects demand to remain strong in Q4

TSX: MTL | CAD 14.67 | Outperform | Price Target CAD 17.00

Sentiment: Positive

Our view: Q3 results were strong and came in at $98MM, comparing to consensus $90MM (RBC: $93MM). Results were above our expectations on Specialized & Industrial Services and Logistics & Warehousing due to higher pricing in both segments. Overall, another very impressive quarter for MTL. Management highlighted that the current operating environment is perhaps the best they have ever seen, consistent with the record results. Management did note however that they expect future results to moderate due to central bank actions to tame inflation, but that this may occur next year as all indications point to a solid finish to the year. Overall, very positive Q3 results, and key focus on the call will be on the outlook and a potential pickup in M&A activity.

First impression

Q3/22 results above consensus. MTL reported adjusted EBITDA of $98MM, above consensus $90MM (RBCe: $93MM). Revenue of $518MM was mostly in line with consensus $525MM (RBCe: $525MM). Margins also came in above on solid pricing. Highlights by segment as follows, with details shown in Exhibit 1.

LTL – EBITDA in line (EBITDA $41MM; RBCe $42M). Revenue was up +19% Y/Y to $202MM (RBCe: $213MM) due to M&A, fuel surcharge and pricing. EBITDA margin of 20.4% was above our 19.6% due to rate increases.
Logistics and Warehousing (L&W) – EBITDA above (EBITDA $33MM; RBCe $30MM). EBITDA was higher due to higher pricing and strong demand in virtually all business units.
Specialized and Industrial Service – EBITDA above (EBITDA $25MM; RBCe $20MM). EBITDA was higher y/y due to higher pricing. The demand for specialized services including dewatering, water management, pipeline hauling, oilfield activity and construction projects in northern Manitoba were the primary reasons this segment grew revenue.
U.S. & International Logistics – EBITDA below (EBITDA $1.5MM; RBCe $2.4MM). EBITDA down y/y as freight demand for full truckload shipments softened in the third quarter impacting total revenue and margin per load due to competitive pricing.

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