Drax starts strategic review

Drax Power Station.
Drax Power Station.
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POWER producer Drax reported an 18 per cent rise in first-half core earnings thanks to higher production at its power plant and said it had started a strategic review to re-assess its long-term business model.

Drax made £120m in first-half core earnings, up from £102m a year earlier, resulting in a £53m profit before tax.

It announced a half-year dividend payment of 5.1 pence per share, up from 4.7 pence per share paid for the same period last year.

Drax shares fell 30 percent on July 8 when the Government removed a climate tax exemption from which Drax had benefited since 2001.

Dorothy Thompson, chief executive of Drax, said: “Drax has performed extremely well over the last six months and we are well advanced with our long-term strategy to become a predominantly biomass-fuelled power provider.

“While there are elements outside our control, particularly regulatory challenges and weak commodity markets, the underlying fundamentals of the group remain strong.

“The UK needs to go green in an affordable way, and is looking to Drax to play a significant role. Through our continued transition to sustainable biomass we are Europe’s largest single source of renewable energy, powering the UK’s homes and businesses with reliable, low carbon and affordable electricity.

“Drax is uniquely placed to provide a solution to the UK’s needs over the decades ahead and, as such, we expect the potential long-term value of the business to become increasingly evident. Importantly our business sector requires long-term investment and we need a stable policy and regulatory regime to support it. We look forward to continuing our discussions with Government to ensure we can deliver what the UK needs in the most effective way.”