Drax reports rise in core earnings

Drax, the operator of Britain’s largest coal-fired power station, posted a better-than-expected three per cent rise in first-half core earnings thanks to well-timed hedging, but said full-year profit would be below 2010 levels as coal prices continue to climb.
By The Newsroom
Published 2nd Aug 2011, 09:40 BST

Drax, whose coal-fired power station in North Yorkshire supplies about seven per cent of Britain’s electricity, reported first-half EBITDA (earnings before interest, tax, depreciation and amortisation) of £190m ($308.9m).

“We have seen improved profits for the first six months of the year, compared to the same period last year, which are a result of a better trading environment and some attractive forward sales made in previous years,” the company said in a statement.

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It warned, however, that the second half of the year will not benefit from the same level of enhanced margins, leading to full-year underlying profit coming in below 2010 levels.

“We remain cautious in our outlook for the power market and recognise that for the rest of the year we will have less benefit from strong forward margins secured in prior years,” Drax said.

Analysts currently expect EBITDA of £87.5m for the second-half.

Shares in the company closed at 529p on Monday.

Related topics:BritainNorth Yorkshire