Home Estate Planning Drax bumps up dividend as pellet-burning fuels bumper profit

Drax bumps up dividend as pellet-burning fuels bumper profit

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Power generation firm Drax has shrugged off a run of bad public relations showings to post a bumper set of 2023 results.

Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped 66 per cent to £1.2bn, while total gross profit rose 91 per cent from £1bn to £1.9bn.

Adjusted operating profit came in at £782m, up £218m on the year prior, while cash generated from operations rose to £1.1bn from £320m.

Operating cashflows before movements in working capital of £1bn were an increase of 38 per cent, against 2022 levels of £734 million, reflecting increases in adjusted EBITDA.

The company proposed a final dividend of 13.9 pence per share (2022: 12.6 pence per share), a 10 per cent increase, while total basic earnings per share came in at 142p, up from 21.3p this time last year.

The firm also booked a £215m Electricity Generator Levy (EGL) charge, given to power generators on the back of the unprecedented increase in the wholesale price of electricity.

Drax operates the country’s largest power station in North Yorkshire which provides 12 per cent of the UK’s renewable electricity. It’s claimed by the company to be the largest source of renewable power by output at 11 per cent.

Last month, a spat unfolded between Drax and a climate think tank over whether a new multi-billion pound energy facility would save or cost the UK taxpayer.

Will Gardiner, chief executive of Drax Group, said: “Drax performed strongly in 2023 and we remained the single largest provider of renewable power by output in the UK.

“We have created a business which plays an essential role in supporting energy security, providing dispatchable, renewable power for millions of homes and businesses, particularly during periods of peak demand when there is low wind and solar power.

“Policy support for our UK BECCS project continues to progress and we remain in formal discussions with the UK Government to ensure Drax Power Station can play a long-term role in UK energy security, creating thousands of jobs during construction and helping the country reach Net Zero.

It was revealed this morning that the firm could face potential legal action from its own shareholders over alleged false environmental claims.

City law firm Mishcon De Reya is investigating the potential group claims.

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