Strong full year results for Drax despite £60m Covid hit
Drax Power Station operator, Drax Group, says it has managed a strong financial performance in the face of disruption caused by the pandemic.
The listed company has issued its full year results for the 12 months ended 31 December 2020, which include total revenues of £4.2bn (2019: £4.4bn) with adjusted EBITDA from continuing and discontinued operations up £2m to £412m (2019: £410m).
These figures include an estimated COVID-19 impact of £60m, principally related to Drax’s SME customers.
The business reported a total operating loss of £156m compared to a £48m profit in 2019. Drax says this mainly reflects £239m worth of asset obsolescence charges plus the £34m of coal operation closure costs.
And pre-tax losses were £235m, compared to a £16m loss in 2019.
Drax has reported a strong cash generation and balance sheet, adding that in 2021 it will complete the sale of its existing gas generation (January 2021) and end its commercial coal operations (March 2021).
Will Gardiner, CEO of Drax Group said: “Drax has supported its customers, communities and employees throughout the Covid-19 pandemic and I want to thank colleagues across the Group for their commitment and hard work over the last year.
Will Gardiner
“We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.
“Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators.
“We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax.
“This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.
“The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world’s leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) – taking us even further in our decarbonisation.”
Commenting this morning, Andy Skelton, CFO at Drax, said: “Our results have been strong, with adjusted EBITDA of £412m, more than last year despite the pandemic.
“We’ve managed to deliver a robust performance that is in line with market expectations, delivering for our stakeholders.
“Our biggest challenge has been keeping our employees safe, as we have a lot of operational staff on our sites who’ve been working in a socially distanced way to keep the lights on for homes across the country.”
He said Drax is looking forward to being able to capitalise on plenty of exciting opportunities over the next six months, in spite of continuing Covid related uncertainty.
He added the sale of the company’s gas portfolio would play an important role in helping the UK meet its net zero carbon ambitions.
