RNS Number : 5930R
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
In response to increased pressure on European gas markets and associated concerns about electricity security of supply in the UK this winter, Drax continues to optimise its biomass generation and logistics. To accomplish this Drax is reprofiling biomass generation and supply from the summer to the winter, enabling it to provide high levels of reliable renewable electricity generation in the UK throughout the winter when demand is likely to be higher.
The Group also expects to provide additional support from pumped storage hydro at Cruachan Power Station, building on a strong year to date performance, which reflects a high level of system support activities.
Separately, at the request of the UK Government, Drax has now entered into an agreement with National Grid – in its capacity as the electricity systems operator – pursuant to which its two coal-fired units at Drax Power Station will remain available to provide a “winter contingency” service to the UK power system from October 2022 until the end of March 2023. The units will not generate commercially for the duration of the agreement and only operate if and when instructed to do so by National Grid.
Under the terms of the agreement, Drax will be paid a fee for the service and compensated for costs incurred, including coal costs, in connection with the operation of the coal units in accordance with the agreement.
Full year expectations
Reflecting these factors, Drax now expects that full year Adjusted EBITDA(1) for 2022 will be slightly above the top of the range of analyst expectations(2), subject to continued good operational performance.
(1) Earnings before interest, tax, depreciation, amortisation, excluding the impact of exceptional items and certain remeasurements.
(2) As of 5 July 2022, analyst consensus for 2022 Adjusted EBITDA was £613 million, with a range of £584-£635 million. The details of this company collected consensus are displayed on the Group’s website.
Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949
Drax External Communications: Ali Lewis
+44 (0) 7712 670 888