Live Updates > Live Update Details
2025-07-31 17:30:12
Drax bucks the trend amid declining profits: Increased buybacks: Can biomass save the day? (1) British energy company Drax announced an 11% year-on-year decline in adjusted core profit for the first half of the year. (2) The profit decline was primarily due to lower UK wholesale electricity prices, but the company also announced an extension of its share buyback program and increased wood pellet production. (3) Drax's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to £460 million (approximately $611 million) from £515 million in the same period last year. (4) Despite the profit decline, Drax expects full-year adjusted EBITDA to remain between £899 million and £910 million. (5) UK wholesale electricity prices, which rose sharply following the Russia-Ukraine conflict, have fallen back over the past few years. (6) Drax plans to increase its £300 million share buyback program by an additional £450 million over three years. (7) The news sent Drax's share price up 4.5% to 708.50 pence. ⑻ In terms of wood pellet production, Drax's production increased by 5% in the first half of the year to 2.1 million tons, up from 2 million tons in the same period last year. ⑼ Adjusted EBITDA from wood pellet production was £74 million, up from £65 million in the first half of 2024. ⑽ Earlier this year, the UK government extended its biomass power generation subsidies (Contracts for Difference), which were originally scheduled to expire in 2027, to 2031. ⑾ Drax expects to sign final subsidy agreements with the UK government for its four biomass power generation units later in 2025. ⑿ Under the plan, Drax's power plant in North Yorkshire will be able to increase power generation during periods of power shortage, reducing its reliance on natural gas and European imports, and reduce power generation during periods of oversupply.
