The Monadelphous Group Limited (ASX: MND) share price was a strong performer on Wednesday.
The engineering company's shares finished the day 4.5% higher at $16.06. This latest gain means its shares are now up 18% year to date.
Why did the Monadelphous share price zoom higher?
The catalyst for this gain appears to have been news that Monadelphous has won a major contract.
According to the release, the company has been awarded a five-year contract with mining giant Rio Tinto Limited (ASX: RIO).
This contract is for the provision of fixed plant maintenance and shutdown services at Rio Tinto's iron ore operations in the Pilbara region of Western Australia. The contract has a value of over $100 million in aggregate over a five-year period.
Monadelphous's managing director, Rob Velletri, was pleased with the contract win.
He said: "The contract allows us to build on our longstanding relationship with Rio Tinto. Our focus will be on the delivery of safe, reliable, innovative and cost-effective solutions."
"We have seen significant growth in our maintenance division over the last two years, with a more than 50 per cent increase in revenue. This award, which is a continuation of the provision of maintenance services to Rio, ensures a strong pipeline of future work within the iron ore sector in the Pilbara," he added.
Given that Monadelphous has provided services to Rio Tinto's iron ore operations for more than 25 years, I don't think this contract award will have been a big surprise.
However, due to the size of the contract, it is still undoubtedly a positive for Monadelphous and its shareholders.
Furthermore, it is the latest in a string of contract wins for the company in 2019. These wins appear to have positioned it well to return to growth in FY 2020.
