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Drax on track to meet expectations after powerful first quarter

25th Apr 2024 10:45

(Alliance News) - Drax Group PLC on Thursday reported a strong system support and generation performance during the first three months of the year as it reiterated expectations for adjusted earnings to be in line with City hopes.

Shares in Drax rose 0.9% to 518.00 pence in London on Thursday.

The Selby, UK-based electricity generator said as at April 22, it had over GBP2.9 billion of contracted forward power sales between 2024 and 2026 on its renewable obligation certificate.

The company added it has a further 3.4 terawatt hours of contracts for difference generation contracted for 2024 and 2025.

Drax said its pellet production business has started the year well, but the market remains challenging.

Drax said it is positive on the outlook for biomass demand and expects this to grow, as sustainable woody biomass is increasingly used for bioenergy with carbon capture and storage, as well as for next-generation sustainable aviation fuels and the group continues to develop a pipeline of sales opportunities in these new markets.

Chief Executive Will Gardiner said: "We continue to deliver a strong system support and generation performance, providing dispatchable, renewable power for millions of homes and businesses."

"We are excited about the opportunity to deliver BECCS at Drax Power Station, the country's largest source of 24/7 renewable power by output."

"Our BECCS plans could help the UK meet its net-zero targets and continue to support the country's long-term energy security, while creating thousands of new jobs across the region," he stated.

Drax expects 2024 adjusted earnings before interest, taxes, depreciation and amortisation to be in line with market expectations. As of April 22, Drax put the market consensus at GBP968 million, with a range of GBP881 million to GBP1.10 billion.

By Jeremy Cutler, Alliance News reporter

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