Oil services supplier Wood Group (LON:WG.) reported lower first-half profits as oil prices fall but said it was saving more cash than expected.
Wood said conditions in oil & gas markets were still challenging as the price of a barrel of Brent crude dipped to US$48.42, with US light crude also down to US$41.5.
The company said it was taking measures to offset the impact of reduced investment by customers and pricing pressure.
It saved $40m in overhead costs in the first half, significantly ahead of initial estimates, and cut jobs by 13% since December.
Profit from continuing operations before tax and exceptional items dropped 14.3% to US$156.3mln on a 19.3% fall in total revenue to about US$3.1bn.
Total pre-tax earnings before interest and amortisation slipped 7.4% to $225.9mln against a backdrop of reduced activity throughout the oil services sector.
Revenue in the group's PSN Production Services arm was down 21.7%, which Wood said reflected lower activity particularly in the Americas, where there was strong growth in US shale in 2014, and the North Sea.
Chief executive Bob Keiller said: "Our outlook for 2015 overall remains unchanged and we anticipate that full year performance will be in line with analyst consensus.
"With little prospect of short term improvement in market conditions, we will focus on remaining competitive and protecting our capability, working with clients to reduce their overall costs, increase efficiency and safely improve performance.”
Shares rose 11.5p to 591p in the first hour of London trading.
Broker Investec has reduced its full year 2016-17 earnings per share estimates for Wood by 4-5% and lowered its price target.
"Cost-cutting should mitigate margin pressure in H1," analyst Neill Morton said: "However, we believe it is only a matter of time until WG succumbs, particularly if large-scale engineering awards are not forthcoming for FY16."
Separately, Wood said it had won a new five year, US$ multi-million contract with Royal Dutch Shell (LON:RDSB) to provide services to four onshore oil fields in Gabon.
Wood will provide integrated engineering, construction, maintenance and industrial services to the Rabi, Gamba, Toucan and Koula assets.
It represents WGPSN’s first major contract in Gabon and should provide jobs for around 200 Gabonese nationals.