Drax posts lower EBITDA for H1, says company was 70% renewable

UK power producer Drax Group Plc (LON:DRX) saw its EBITDA fell by 42% on the year to GBP 70 million (USD 92m/EUR 83m) in the first half of 2016, a period during which about 70% of its electricity generation was renewable.

The company blamed the decline in earnings before interest, tax, depreciation and amortisation (EBITDA) on the effect of weak commodity markets and the removal of the Climate Change Levy exemption for renewables.

The weaker EBITDA result led to a decrease in underlying earnings, from GBP 41 million to GBP 17 million, shows the press release today.

“Of particular note is that for the period in question, of the 10.9 TWh of energy we produced, circa 70% was generated using compressed wood pellets. We are now, firmly, a predominantly renewable energy generator, and one of the largest in the UK,” chairman Philip Cox said. The company owns the Drax power station, parts of which have switched from coal to biomass.

For the full year, Drax expects EBITDA to be around the low end of the consensus range of GBP 146 million to GBP 185 million. The exact figure remains subject to timing of CfD investment contract award for Drax’s third unit conversion.

(GBP 1.0 = USD 1.312/EUR 1.191)

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