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(Alliance News) - Drax Group PLC on Thursday said its loss widened in 2020, in large part due to charges associated with an end to commercial coal generation and the decision not to develop new gas fired power at Drax power station.
For 2020, the Selby, England-based electrical power station operator posted a GBP234.7 million pretax loss, far wider than its GBP15.6 million loss the year before.
Contributors to this widened loss included GBP239.3 million of asset obsolescence charges, with no such charges the year before, of which GBP225.1 million was from property, plant and equipment asset obsolescence charges due to coal closure and GBP13.4 million was asset obsolescence charges due to a decision not to develop combined cycle gas turbines at Drax power station.
Chief Executive Will Gardiner explained: "Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.
Revenue fell 5.1% to GBP4.24 billion from GBP4.47 billion.
The company increased its dividend by 7.5% per share, however, to 17.1 pence from 15.9p.
The company is aiming to be carbon negative and said no new gas generation is planned for Drax power station, though it will retain options for system support gas in the next capacity auction.
Having completed the sale of its existing gas generation in January, it will end commercial coal in March.
Drax is focusing instead on progressing its biomass strategy, with its proposed acquisition of Canadian biomass producer and supplier Pinnacle Renewable Energy Inc announced February 8.
"The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world's leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage - taking us even further in our decarbonisation," said Gardiner.
Shares in Drax were down 1.2% at 390.40p in London on Thursday morning.
By Anna Farley; annafarley@alliancenews.com
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