Drax on track to beat market expectations

DRAX today said it was on track to beat market expectations in its full year results as it continues to experience attractive trading conditions in the commodity markets.

In a trading update Drax said that it anticipated that its full year results will be modestly higher than recent market EBITDA consensus of around £400m, reflecting its current contracted position.

The company also said it expects generation levels for the full year to be modestly higher than in previous years.

In its trading statement Drax said: “Our contracted position below reflects the fact that we have generated and expect to generate additional volumes of power in what have been historically lower margin periods”.

Last year Drax felt the impact of falling wholesale electricity costs but a doubling in the price of coal in its pre-tax profits, which fell 29% to £449m.

Drax burned 9.8 million tonnes of coal in 2007 but costs soared thanks to strong demand from the Far East.

The company added that its board expects to declare an interim ordinary dividend of 5p per share and a special dividend in respect of the six months ending June 30 with the half year results.