Shares of Aberdeen-based oil and gas services giant Wood Group fell around 8% on Tuesday after it said 2016 revenue fell 15.7% to $4.93 billion, profit plummeted 62% to $34.4 billion, and that it remained cautious on the near term outlook.

Nonetheless, Wood Group increased its dividend 10% to 33.3c per share.

Wood Group CEO Robin Watson said: “Overall, the oil & gas market continues to present challenges in 2017.

“We anticipate modest recovery only in markets such as US onshore and greenfield offshore projects.

“2017 performance will reflect the current pricing environment for work which remains competitive, although we believe our cumulative overhead cost savings since 2015 will be sustainable in 2017.”

Wood Group said profit before tax and exceptional items fell from $337.6 million in 2015 to $233.3 million in 2016.

Watson said that following a “sustainable overhead cost reduction” of $148 million in 2015, the company reduced overhead costs by a further $96 million in 2016.

He said underlying headcount, excluding acquisitions, was down 36% over a two year period.

Wood Group shares fell about 8% to around 754p, reducing its current stock market value to around £2.85 billion.

Watson maintained: “There is no change to our appetite or focus on mergers and acquisitions.

“Opportunities have been less than anticipated in 2016 and we have remained disciplined as regard to potential targets.

“We continue to focus on opportunities that may better consolidate our offering or accelerate delivery against our strategic objectives, including broadening our end market exposure.”