Shares of Aberdeen-based oil and gas services giant Wood Group rose about 2.5% after it said it expects its 2016 financial performance to be in line with expectations and it intends to increase its dividend “by a double digit percentage” despite “challenging” oil and gas markets.

Wood Group said it saw “indications of modest recovery” in selected markets.

Wood Group shares rose more than 2% to around 888p, giving the company a current stock market value of roughly £3.4 billion.

In a pre-close trading update for the year to December 31, 2016, Wood said: “Lower oil prices have endured and activity has fallen across the sector.

“In response, we have significantly reduced our cost base, worked alongside customers to improve efficiency and refined our operating structure to enhance customer delivery.

“We anticipate full year 2016 financial performance in line with current market expectations.

“Our balance sheet remains strong and our intention remains to increase the dividend for 2016 by a double digit percentage.”

Looking ahead, Wood said the market continues to present significant challenges and “although these are likely to persist during 2017, in selected markets we do see indications of modest recovery.”

According to a Wood Group-provided consensus, earnings before interest, tax and amortisation (EBITA) is expected to be around $370 million for the full-year, and revenue is expected to be around $5.18 billion.