The MMA Offshore Ltd (ASX: MRM) share price is having a strong start to the week.
In morning trade, the ASX All Ords energy share is up 9% to a 52-week high of $1.29.
This means its shares are now up over 100% since this time last year.
Why is this ASX All Ords share rocketing higher?
Investors have been bidding the company’s shares higher after it released a trading update for FY 2023.
According to the release, MMA Offshore expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) for FY 2023 to be in the range of $66 million to $68 million. This will be an increase of over 100% on the EBITDA it reported in the previous financial year.
Management advised that it had a stronger-than-expected second half with a number of vessels trading through the traditionally quieter Southeast Asian monsoon period. In addition, it achieved solid utilisation across the fleet. This was despite four of its vessels being dry-docked during the second half.
Overall second-half vessel utilisation averaged 79%, which is up from 71% for the previous corresponding period. For the full year, vessel utilisation averaged 80%, up from 73% in FY 2022.
The key driver of this was strong demand from both its traditional oil and gas markets and the growing offshore wind market. This strong demand is translating into higher rates for its assets and services as the market tightens.
MMA’s subsea division also had a strong year. It delivered several substantial integrated projects across oil and gas, offshore wind, and defence.
The ASX All Ords energy share’s managing director, David Ross, commented:
Strong activity across all our key markets is driving higher earnings and returns on our assets. The current recovery in oil and gas activity combined with growth in new offshore wind markets is presenting a unique opportunity for MMA to maximise the returns from our existing business whilst positioning the Company for growth into the future. MMA will deliver strong earnings growth for FY2023 and we expect the current positive market conditions to continue into FY2024.
