Drax Group, a renewable energy company, has demonstrated strong operational and financial performance in the first half of 2024. The company's adjusted EBITDA grew, driven by renewable generation, pellet production, and Industrial & Commercial (I&C) activities.
Drax's financial stability is reflected in its robust liquidity and balance sheet, with £515 million in cash and committed facilities as of June 30, 2024. The company secured £682 million in new facilities maturing between 2027 and 2029 and repaid £949 million of shorter-dated maturities. The dividend is set to increase by 12.6% for the full year, rising to 26.0 pence per share, with an interim dividend of 10.4 pence per share, representing 40% of the full-year expectation. Additionally, a share buyback program worth up to £300 million will commence in Q3 2024.
For the six months ending June 30, 2024, Drax's adjusted EBITDA reached £515 million, up from £417 million in H1 2023. Net debt decreased from £1,274 million to £1,035 million, while adjusted basic EPS increased to 65.6 pence from 46.0 pence. Operating profit rose to £518 million from £392 million, and profit before tax increased to £463 million from £338 million.
The pellet production segment saw improvements, producing 2.0 million tons of pellets, up from 1.9 million tons in H1 2023, with better margins. The Aliceville expansion, commissioned in H1 2024, added 130,000 tons of capacity, while the Longview pellet plant is set to contribute an additional 450,000 tons.
Drax Group CEO Will Gardiner highlighted the company's achievements and future plans: “Drax has delivered a strong operational performance, playing an important role in supporting the UK energy system with dispatchable, renewable power, keeping the lights on for millions of homes and businesses, while supporting thousands of jobs throughout our supply chain.
“As well as celebrating 50 years of operations in 2024, we are excited about the opportunities for Drax Power Station, including bioenergy with carbon capture and storage (BECCS). Both the National Grid ESO and the UK’s Climate Change Committee have recently reiterated that BECCS is important for the UK to achieve its decarbonisation goals.
“We look forward to working with the new UK Government to help grow the economy and take steps urgently to deliver a net zero electricity system by 2030. We believe that Drax and our partners across the Humber and Scotland can accelerate growth, create thousands of new jobs and channel billions in private investment into carbon capture and green energy projects, subject to the right government policies to support regional development plans.
“Outside of the UK, through our plans for global BECCS, we are continuing to develop opportunities to provide long-term, large-scale carbon removals and attractive opportunities for growth as part of a potentially trillion-dollar market.”
