26th Feb 2019 09:07
LONDON (Alliance News) - Electricity generator Drax Group PLC on Tuesday said high levels of renewable power generation from sustainable biomass, as well as earnings growth in its wood pellet production business, resulted in 9% growth in annual adjusted earnings, the company's preferred profit measure.
The FTSE 250 company, which operates the Drax power station in North Yorkshire, recorded adjusted earnings before interest, taxes, depreciation and amortisation of GBP250 million for 2018, up 9.2% from GBP229 million in 2017.
The company, which converted a fourth unit to biomass from coal during the year, said adjusted Ebitda for the pellet production business jumped to GBP21 million from GBP6 million. Pellet production increased 64% to 1.351 million tonnes from 822,000 tonnes.
Drax swung to pretax profit of GBP14 million for the year from GBP204 million pretax loss on the back of GBP38 million currency hedging gains and absence of GBP177 million unrealised losses recorded in 2017.
Revenue for the year totalled GBP4.23 billion, up from GBP3.68 billion, driven by Renewable Obligation Certificate sales, the full-year impact of the February 2017 acquisition of Opus Energy, and growth in sales in its B2B Energy Supply business.
"We are confident in our ability to continue growing our earnings and advancing our strategy through the year. We have attractive investment opportunities throughout our business, and while short-term uncertainty over the Capacity Market remains, we look forward to developing those opportunities in a disciplined fashion," said Chief Executive Will Gardiner.
The company, which in December completed the GBP702 million acquisition of a portfolio of pumped storage, hydro and gas generation assets from ScottishPower, proposed a final dividend of 8.5 pence per share, up 12%, giving a total payout of 14.1p, up 15% from 12.3p.
Shares in Drax were down 1.6% at 367.80 pence each on Tuesday morning.
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