Drax Continues To Invest For Growth With 30% Rise In Earnings In The First Half Of The Year
Drax Group, the company that produces 11% of
the UK's renewable electricity, said it earnings rose by 30% to £179m in the six months to 30 June. This includes £44m from the Covid-19 pandemic which has principally impacted on the SME market.
The company reported it delivered a robust performance in the first six months of 2020 delivering for stakeholders and expanding its biomass strategy.
It said it was supporting customers, managing the impact of Covid-19 and focusing on the underlying strength in its portfolio.
Will Gardiner, CEO of Drax Group said: “With these robust half-year results, Drax is delivering for shareholders with an increased dividend while continuing to support our employees, communities and customers during the Covid-19 crisis.
“As well as generating the flexible, reliable and renewable electricity the UK economy needs, we’re delivering against our strategy to reduce the costs of our sustainable biomass and we’re continuing to make progress pioneering world leading bio-energy with carbon capture technologies, known as BECCS, to deliver negative emissions and help the UK meet its 2050 net zero carbon target.
“National Grid stated this week that the UK can’t reach net zero by 2050 without negative emissions from bioenergy with carbon capture and storage. BECCS delivers for the environment and also provides an opportunity to create jobs and clean economic growth in the North and around the country.”
Drax said it had increased its stability services to the Grid and supported its staff, communities and customers by donating 850 laptops to students, providing 189 care homes with free energy and donating £150,000 to provide debt advice to SMEs facing financial hardship.
On biomass there is a long-term sustainable future with the company reporting a 9% reduction in cost and improved pellet quality, while continuing to ensure sustainability.
Biomass Domes at Drax Power Station
Drax aims to supply 5m tonnes of Biomass by 2027, cutting costs to £50 per MWH through improvements, efficiencies and investments, already underway.
On working towards a net zero UK the company said it continued to expect to end commercial coal generation in March 2021
2020 Half Year Performance Highlights
Robust performance, delivering for stakeholders, progressing biomass strategy .
30% increase in Adjusted EBITDA to £179m
No change to estimated full year impact of Covid-19 on Adjusted EBITDA – c.£60m
High level of contracted revenues 2020-2022
Strong balance sheet and liquidity
Sustainable and growing dividend – 7.5% expected increase for 2020
Impairment of coal assets – end of commercial coal generation March 2021
Increased biomass production, improved quality, reduced cost
Strong Generation portfolio performance
Increased demand for system support services
Investment in biomass supply chain expansion and cost reduction
Development of BECCS technical