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Yorkshire energy leader Drax reports £83m pretax loss following year of change

North Yorkshire energy provider Drax Group has reported a loss before tax of £83m, after posting profits of £184m for the same period last year.

Releasing its half yearly results this morning, Drax cited increases to depreciation, amortisation costs and unrealised losses on derivative contracts as the major cause for the hefty swing.

Profit before tax was adversely impacted by higher depreciation (£22 million), relating to Drax’s previously announced accelerated depreciation of coal-specific assets, one off costs associated with the firm’s Opus Energy acquisition (£6 million) and the refinancing (£24 million), as well as amortisation of newly-acquired intangible assets in Opus (£19 million).

In addition, non-cash unrealised losses on derivative contracts in the period of £65 million were moved adversely by £228 million from 30 June 2016, principally a result of foreign exchange rate movements.

Nevertheless, consolidated revenue for the period of £1,801 million was £314 million greater than the same period in 2016, driven by higher generation sales and the acquisition of Opus Energy.

Dorothy Thompson, Chief Executive of Drax Group plc, said: “We have made good progress with our strategy during the first half of 2017, acquiring Opus Energy and a third compressed wood pellet plant, in addition to refinancing and implementing a new dividend policy.

“Central to our strategy is the delivery of targeted growth through deploying our expertise across our markets and, in so doing, diversifying, growing and improving the quality of earnings whilst reducing exposure to commodity market volatility.

“Delivering reliable renewable electricity remains at the heart of our business. We continue to produce at record levels, helping to keep the UK’s electricity system secure and supplying our customers through our retail business.

“With the right conditions, we can do even more. We are progressing our four new rapid response gas power projects and our research and innovation work has identified potentially attractive options to repurpose our remaining coal assets.

“We continue to play a vital role in the UK’s energy infrastructure and our strategy is helping to change the way energy is generated, supplied and used for a better future.”

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