10/24/2012 06:20 EDT | Updated 12/24/2012 05:12 EST

Mullen Group boosts profits in Q3 on foreign exchange gains, revenues drop

OKOTOKS, Alta. - Mullen Group Ltd. (TSX:MTL), which provides transportation and other services to the oilpatch, said Wednesday that its third-quarter net income rose to $42.9 million, as it benefited from foreign exchange gains and other items.

The Alberta-based company said earnings were equal to 52 cents per share, compared to $11.3 million or 14 cents per share a year ago.

The results were boosted by foreign exchange gains of $27.9 million and an improvement in fair value of its investments of $15.5 million.

Filtering out those factors, earnings were down 17.9 per cent on an adjusted basis to $30.8 million from $37.5 million.

The company said revenue slipped 6.8 per cent to $335.4 million from $359.7 million.

The majority of the decline was tied to its oilfield services division, which saw revenues fall 12.2 per cent or $28.3 million from the $231.2 million booked a year earlier.

In the third quarter, Mullen said 17.3 per cent fewer wells were drilled while there was a 21.9 per cent decline in the length of metres drilled over the year before.

"As we entered the quarter there were clear signs of decreased drilling activity in western Canada, the results of which translated into decreased revenue in our businesses tied to drilling," said president and co-CEO Stephen Lockwood in a release.

"It is also important to note that the delay of a number of large pipeline construction projects negatively impacted our revenue in the quarter, however, we expect this revenue will be made up on a go forward basis."