Final results from power station owner Drax Group (DRX.L) reveal a fall in pretax profit after higher carbon costs. Pretax profit fell to £32M from £190M. EBITDA for 2013 down 23% at £230 million, dividend was also cut to 17.6p a share from 25.3p.
The company also highlighted the possibility of a weaker 2014 with the milder winter conditions experienced this year.
Dorothy Thompson, Chief Executive of Drax, said:
“As expected, the increasing cost of carbon drove earnings down year on year. Recognising this, we have been investing significant capital to transform Drax into one of the world’s largest renewable generators, burning sustainable biomass. At the same time we have delivered strong operating performance across the business, including notably, good output, efficiency and reliability from our first converted unit.
“We are well placed to secure CfD Investment Contracts for our second and third unit conversions. We look forward to the conclusion of the government’s contract award process this Spring. These contracts will underpin the investment required to secure the sustainable biomass supply chain for our second and third unit conversions. We are targeting April 2015, when these contracts become effective, for our next unit conversion and quarter four of 2015 at the earliest, for the third.
“In 2016, we expect half of Drax to be fuelled by sustainable biomass, some 4% of the UK’s electricity. In delivering this transformation, we will provide cost-effective, reliable renewable power to consumers, secure jobs at Drax and across the UK supply chain and deliver attractive returns for our investors.”