De-carbonisation progress boosts Drax results
Drax Group, the listed company which operates Drax Power Station in North Yorkshire, has continued to see its revenue and profits rise in the first half of the current financial year as it focuses on its de-carbonisation.
Reporting on the period to 30 June 2019, Drax said it made a £4m pre-tax profit; up from the £11m pre-tax losses reported this time last year after outages had impacted its performance. Its revenue for the period grew to £2.2bn, up from £2bn last year.
And its group adjusted EBITDA was up 35% to £138m, from £102m in H1 2018.
Speaking to TheBusinessDesk.com this morning, CEO of Drax Power, Andy Koss, said: “We are pleased with these strong results, which have really been boosted by our power generation capabilities.”
The firm’s generation division reported an EBITDA of £148m, up 68% compared to the first half of 2018 (£88m). During the six month period, 94% of power was generated through biomass and 6% with coal; and Drax is expecting to hear in October whether it has been successful in its plans to convert the coal generation into gas generation – thus de-carbonising the whole plant.
Koss added: “We have made very good progress with initiatives that are focused on de-carbonisation. We have also seen a 52% drop on emissions year-on-year as we are moving away from coal to renewable and low carbon sources of energy.”
He said that the whole power grid recorded its lowest carbon day ever, hitting the 2030 target on 30 June 2019.
Koss added that the firm had spent money and time putting improvements in place to minimise the risk of outages since this time last year.
Drax said the revenues included £36m from acquired Hydro and Gas assets in the six-month period. Drax is still integrating Scottish Power after the multi-million pound deal to acquire the firm in October last year. Koss said he was very pleased with the integration so far, which he said has brought “quailty assets” as well as a great team into the Drax Group.
Its interim dividends were up 12.5% to £25m (6.4p per share) (H1 2018: £22, 5.6p per share)
Will Gardiner, Chief Executive of Drax Group, added: “Drax Group has delivered strong profit and dividend growth in the first half of the year. Integration of our new Hydro and Gas generation assets is progressing well and the value the Group delivers from supporting the energy system has almost doubled. Drax is supporting British business with innovative new energy services and, despite challenging market conditions, our Customers business continues to grow. Our biomass cost reduction initiative and plans for expanded biomass self-supply are going well.
“Drax wholeheartedly supports the UK’s target of achieving net zero carbon emissions by 2050. Reducing our greenhouse gas emissions by half in the past year underscores Drax’s commitment to this goal. With the right investment and regulatory framework we could go further and Drax could become the world’s first carbon negative power station – something the UK Committee on Climate Change recognises will be crucial.”
