Drax nearly doubles full-year profits, plans investment push

Drax Group nearly doubled its full-year operating profits even as it continued to invest heavily in the business.

Chief executive officer, Will Gardiner, highlighted Drax's role in helping the UK meet peak power demand when there was low supply from wind and solar.

"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," Gardiner said.

"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."

The company was the largest source by output of renewable power in the UK, equivalent to 11% of the annualised total, 19% of peak and at times 70% of in-day peaks.

Adjusted earnings before interest, taxes, depreciation and amortisation jumped by 83.6% to £731m, while adjusted basic earnings per share more than tripled to 85.1p.

However, the power generator's profit before tax fell from £122m in the year before to £78m.

As a proportion of EBITDA nevertheless, net debt reduced from 2.8 times to 1.6.

The company's boss also sounded a very confident note on Bioenergy Carbon Capture and Storage technologies, especially following approval of the Inflation Reduction Act in the US.

According to Gardner, Drax stood ready to invest billions of pounds in developing BECCS.

Capital investments were seen rising from £255m in 2022 to £570-630m in 2023.

Drax proposed a final dividend of 12.6p for an 11.7% increase in the total payout to 21.0p.