23rd Feb 2023 10:20
(Alliance News) - Drax Group PLC on Thursday reported a lower profit in 2022 as cost of sales outpaced revenue growth.
The Yorkshire, England-based power generator said in 2022, pretax profit fell 36% to GBP78.1 million from GBP121.5 million in 2021. Revenue grew 53% to GBP7.78 billion from GBP5.09 billion.
Cost of sales however widened 61% to GBP6.75 billion from GBP4.20 billion. Operating and administrative expenses increased 16% to GBP542.8 million from GBP469.9 million.
Drax declared a total dividend of 21.0 pence per share, up 12% from 18.8p a year prior.
Looking ahead, the company expects continued headwind from inflation, while focusing on developing and introducing new technologies and innovation. This includes a research & development investment of around GBP10 million in a biomass sugar extraction plant.
Chief Executive Officer Will Gardiner said: "Drax is a growing international business with strong cash returns which we are reinvesting to produce more renewable energy and deliver carbon removals while reducing our own carbon emissions. We aim to be at the heart of the energy transition, creating the jobs, renewable power and large-scale carbon removals that the world needs."
Drax added that the UK government's windfall tax, officially named electricity generator levy, "will result in an increase in the group's effective tax rate for 2023". Drax said the levy is applicable to renewable obligation certificates and hydro assets but not pumped storage, contracts for difference or coal. The UK government's energy levy is a windfall profit tax imposed in response to rising consumer energy bills amid the cost of living crisis. It came into effect in May 2022.
Drax shares were 3.5% lower at 650.50 pence each in London on Thursday morning.
By Tom Budszus, Alliance News reporter
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