Aggreko has seen its share price surge more than 3.5 per cent after trimming its spending plans but reassuring the market on its profit forecast.
Shares were up by more than seven per cent in early trading and even though the stock fell back during the day it still closed up 33p to 965p, boosting Aggreko's market capitalisation from around £2.39 billion to £2.47bn.
Shares had been changing hands for more than 1700p as recently as March.
The temporary power and cooling provider said it continued to be affected by the ongoing downturn in global oil and gas and minerals markets during the third quarter of the year.
That came as Saudi Arabia signalled its intention to continue pumping oil to protect its global market share in spite of the slump in the Brent crude price over the past year.
The Middle East based Organisation of the Petroleum Exporting Countries (OPEC) has consistently refused to cut production.
While Aggreko acknowledged the difficulty in some of its markets it outlined that the falls had been almost offset by strong growth in other areas such as petrochemical and refining.
Overall the rental solutions division, which typically operates in more mature markets, was down by just one per cent in the three months to the end of September. It was also helped by strong trading in North America and Europe in the temperature control arm.
The power solutions arm, which works more in emerging markets, dipped 11 per cent in the quarter in spite of the contract for the European Games athletics competition in Azerbaijan and growth in Russia and Africa. Trading in Brazil was said to have been hit by weak economic conditions there.
Utility revenue in that part of the business was 21 per cent lower with previously flagged price reductions in Bangladesh and changes to a contract in Panama major factors.
Stripping those two aspects out utility revenue was still down 12 per cent with the ongoing uncertainty in Yemen and Venezuela among the factors cited.
Louise Bryant, head of investor relations, said: “The trading conditions are not easy in that part of the business but we are encouraged that pricing, if you exclude the Bangladesh piece, is broadly flat which is good.
“Clearly volumes are a little slower and it appears to be the cast that customers are thinking twice before procuring power, be that permanent or our more flexible power.
“There are countries we are in which are challenging, which is the nature of this business to some extent and you just have to manage your way through it.”
Order intake in the year to date is said to be 561 megawatts, behind the 697MW at the same point last year.
Aggreko said the prior year included around 170MW of summer work in Saudia Arabia and Oman which was not repeated.
It outlined the extension of its 260MW gas contract in Mozambique until the end of this year and a 12-month deal to supply the Guam Power Authority with a 40MW power package to supplement the island’s grid network.
Aggreko also trimmed its capital spending on its generator fleet by a further £20m and now expects to spend around £250m this year. It spent £226m in 2014.
The company forecast spending of around £120m in the first half of 2016 but said it would provide more guidance on that when it reports annual results in March.
Ms Bryant said: “The market environment remains quite difficult and we don’t want to be putting capital into the market if we don’t think it will be utilised.”
Aggreko said it still expects to report underlying profit in the region of £250m to £270m.
Chris Weston, chief executive, said: “I am encouraged with the progress we are making which, regardless of the prevailing market conditions, will strengthen Aggreko and position it well for the future."
The company continues to look at further acquisitions following a deal for Canadian heating solutions firm ICS Group in September.
Ms Bryant added: “There are always bits we are looking it.”
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