24th Jul 2018 08:39
LONDON (Alliance News) - Electricity generator Drax Group PLC said on Tuesday it saw a significant narrowing to its loss for the first half of 2018, even as earnings took a hit from two unplanned outages during the period.
Shares in Drax were down 5.8% at 337.60 pence on Tuesday, the third worst performer in the FTSE 250.
For the six months to the end of June, pretax loss narrowed sharply to GBP11.3 million from GBP103.7 million, due to an unrealised gain on derivative contracts of GBP24.4 million, swinging from a loss of GBP85.7 million, as well as lower depreciation and acquisition costs.
However, earnings before interest, taxes, depreciation and amortisation dropped to GBP101.6 million from GBP120.8 million a year prior due to two unplanned outages, one in its Power Generation business in the first quarter and another in Drax's biomass units.
Revenue in the half rose to GBP2.08 billion from GBP1.80 billion the year before.
Net sales of electricity output were down 17% at 8.9 terawatt hours, compared to 10.7 terawatt hours the prior year.
The group increased its interim dividend by 14% to 5.6 pence from 4.9p the prior year.
Drax said its expectations for 2018 remain unchanged, and expects to see increased Ebitda in the Generation division in the second half of the year.
"Drax continues to be at the heart of decarbonising UK energy, securing government support to convert a fourth unit to biomass and piloting a Bioenergy Carbon Capture and Storage project, supporting the UK Government's carbon capture and storage ambitions. Full year Ebitda expectations remain unchanged," said Chief Executive Will Gardiner.
"However, first half Ebitda was lower, principally due to two specific generation outages. We made excellent progress with our Pellet Production business, driving down costs while producing at record levels and our B2B Energy Supply business continues to increase customer numbers. We also remain on track with our investment projects: the conversion of a fourth unit to biomass, and the development of our OCGT and coal-to-gas repowering options," Gardiner added.
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