Preliminary results for the 12 months ended 31 December 2016 - Drax

Preliminary results for the 12 months ended 31 December 2016

Good operational performance, 65% of electricity from renewable biomass and progress with strategic initiatives.

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RNS Number : 0194X
Drax Group PLC
(Symbol: DRX)

Twelve months ended 31 December

2016

2015

Key financial performance measures

EBITDA (£ million)

140

169

Underlying earnings (£ million)

21

46

Underlying earnings per share (pence)

5.0

11.3

Total dividends (pence per share)

2.5

5.7

Net debt (£ million)

93

187

Statutory accounting measures

Profit before tax (£ million)

197

59

Reported basic earnings per share (pence)

48

14

Financial and Operational Highlights

  • 2016 EBITDA in line with guidance
    • Year on year reduction driven by challenging commodity markets and loss of LECs
    • Mitigated by growth in system support, improving retail and pellet supply profitability
  • Three converted biomass units, CfD approved in December
    • 65% of generation from biomass in 2016 (2015: 43%)
    • Investment completed on budget
  • Statutory profit before tax includes unrealised gains related to foreign currency hedging
  • Strong cash flows and balance sheet

Strategic Highlights and Outlook

  • Acquisition of Opus Energy and open cycle gas turbine projects
  • Focus on delivery of strategy
    • Higher quality diversified earnings and targeted long-term growth opportunities
    • Significant earnings growth
  • Maintain operational excellence across base business
  • Refinancing of existing debt facilities
  • 2017 EBITDA expectations in line with consensus

Dorothy Thompson, Chief Executive of Drax Group plc, said:

“We are playing a vital role in helping change the way energy is generated, supplied and used as the UKmoves to a low carbon future.

“With the right conditions, we can do even more, converting further units to run on compressed wood pellets. This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.

“In a challenging commodity environment Drax has delivered a good operational performance with 65% renewable power generation.

“The acquisition of Opus Energy and rapid response open cycle gas turbine projects are an important step in delivering our strategy, diversifying our earnings base and contributing to stronger, long-term financial performance across the markets in which we operate.”

NOTES FOR ANALYSTS AND EDITORS

See: https://otp.tools.investis.com/clients/uk/drax1/rns/regulatory-story.aspx?cid=1607&newsid=844424