26th Feb 2026 11:47
(Alliance News) - Drax Group PLC on Thursday announced lower yearly revenue and profit for 2025, as lower energy costs and impairments weighed on its operating profit in an otherwise solid year for the renewable energy company.
The company, which also recorded record levels of both renewable energy generation, equivalent to 6% of total UK power, and pellets production, also benefitted from a growth in adjusted earnings per share reflecting the ongoing buyback programme.
Pretax profit fell to GBP189.5 million, down 75% from GBP753.4 million 12 months ago, despite total revenue being down only 13% year-on-year to GBP5.39 billion from GBP6.16 billion in 2024.
The divergence comes mostly as a result of the fall of its operating profit, down 72% to GBP241.3 million from GBP850.2 million last year. The company pointed to GBP377.7 million combined impairments on its Longview pellets project, ascribed to lower-than-expected demand, and UK biomass carbon capture and storage, deemed unlikely to progress in the medium term, as the culprit.
Gross profit showed a similar year-on-year trend to revenue, ending 2025 at GBP1.51 billion, down 19% from GBP1.88 billion 12 months prior.
Despite the mixed results, the Selby, North Yorkshire-based renewable energy company raised its full-year dividend by almost 12% to 29 pence per share from 26 pence per share a year ago.
It also maintained its full-year expectations for 2026's adjusted earnings before interest, tax, depreciation, and amortisation will be in line with analysts' consensus estimates, after recording an adjusted Ebitda of GBP947 million in 2025. Drax targets adjusted Ebitda in the range of GBP600 million to GBP700 million a year post-2027.
Chief Executive Office Will Gardiner said: "In 2025, we produced more renewable power than ever before, delivering energy security for the UK...The signing of the new low carbon dispatchable contracts for difference is an inflection point for the group. It provides the foundation for us to keep supporting the UK with the flexible, renewable power it needs for security of supply this decade and beyond."
He added: "The energy transition and growth in artificial intelligence are creating opportunities for us to invest and grow our business further in line with the country's energy needs. We are making good progress on this with our initial investments in battery energy storage systems, which we see as an attractive market. We will continue to explore options to invest in flexible and renewable energy, creating value for stakeholders and attractive returns for shareholders in line with our capital allocation policy."
Drax shares were up 3.9% to 916.50 pence each on Thursday morning in London.
By Martin Miraglia, Alliance News reporter
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