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Drax expects adjusted earnings to beat analyst expectations

Thu, 15th Dec 2022 10:58

(Alliance News) - Drax Group PLC on Thursday said it expects 2022 earnings to beat analyst expectations.

The Yorkshire-based power generator said the improved outlook for adjusted earnings before interest, tax, depreciation and amortisation is due to good performance and logistics for the remainder of 2022. Drax placed market consensus for adjusted Ebitda at GBP651 million to GBP681 million, which were at least 64% higher from GBP398 million in 2021.

"The power sales reflected in the Generation business's contracted power sales book includes some exchange traded contracts, with higher power prices resulting in an increase in collateral payments on these contracts in 2022," Drax said.

Drax added it is on track for net debt to adjusted Ebitda to be "significantly below" two times by the end of the year, reducing from 2021's ratio of 2.6.

Drax expects "strong" contractor power sales for 2022 to 2024.

Regarding the electricity generators levy announced by the UK government in November, Drax said it engaged with the government and is anticipating an update shortly. The levy is a windfall tax on renewable and low-carbon energy.

Drax will release its 2022 results on February 23.

Drax shares were 0.4% higher at 629.00 pence each on Thursday morning in London.

By Tom Budszus, Alliance News reporter

Comments and questions to newsroom@alliancenews.com