AGGREKO has seen a four per cent rise in underlying revenues in the first quarter of its financial year but warned it was not yet clear what impact lower oil prices will have on the temporary power provider.

Chief executive Chris Weston confirmed its oil and gas business in Scotland has seen revenues drop by around 20 per cent although stressed it was only a small part of the overall group.

A potentially bigger problem is in the North American shale industry where the Glasgow company has had customers demanding discounts as they try to adjust to the fall in Brent crude.

Mr Weston said: "At the end of the first quarter we had calls coming in where people were asking for discounts of between five and 30 per cent."

He confirmed Aggreko has generally given reductions in "the teens" in return for making sure volumes were maintained.

Asked by analysts whether Aggreko is likely to hear if it will be supplying temporary power at next year's Rio Olympics prior its interim results in August, Mr Weston said he was hopeful but it was "difficult to promise" anything definite.

He said: "Time begins to get a bit tight if they leave it into [the third quarter]."

Aggreko has provided its generators to several Olympic events including London 2012 and the winter games in the Russian resort of Sochi last year.

The company's local business, which delivers a wide array of shorter term projects, saw revenue grow two per cent in the first quarter of the year with improved temperature control and power performance partly offset by dampened demand for servicing.

Power projects, which typically installs large scale infrastructure for long periods, was running seven per cent ahead in the three months to the end of March helped by contracts in the Americas, Europe, Middle East and Africa.

That included initial work on the European Games multi-sports event which is staged in Baku, Azerbaijan, next month with Mr Weston also highlighting growth in Panama, Peru and Colombia.

He said restructuring work undertaken in Brazil at the end of last year was starting to bear fruit with an improvement in margins.

Regionally the Asia, Pacific and Australia arm was the only division to see a reduction in revenue as it fell 13 per cent.

Within that power projects dipped 20 per cent mainly as a result of having less equipment on hire in Indonesia. The local business saw stronger revenue in New Zealand, including for the Cricket World Cup, and South Korea. However overall it recorded a modest decline because of further falls in Australia as the mining industry there continues to show few signs of recovery.

The Americas were up by seven per cent while EMEA had 10 per cent growth in the quarter.

Underlying trading profit for the first half of the year is expected to be lower partly as a result of higher mobilisation costs, Japanese and military contracts coming to an end and the pressures in US shale.

Mr Weston said: "Whilst it is early in the year and the market environment remains uncertain, we continue to expect underlying trading profit for the full year to be broadly in line with last year."

Graham Brown, from Canaccord Genuity, raised his target price on the Aggreko stock from 1237p to 1461p but kept a sell rating.

John Lawson from Investec said the trading update was "cautious" and also kept a sell rating with a target price of 1330p.