(Alliance News) - Drax Group PLC on Wednesday posted a swing to loss for the first half of 2020 as it said it anticipates full-year earnings to in line with expectations and to be able to increase its annual payout.
Shares in the FTSE 250-listed power generation company were trading 0.1% lower at 271.20 pence each on Wednesday at midday in London.
For the six months ended June 30, Drax posted revenue of GBP2.22 billion, marginally lower from GBP2.23 billion a year before. Pretax loss was GBP60.7 million, a sharp reversal from a profit of GBP3.5 million a year ago.
The Selby, England-based company said the deterioration in its performance was due to the impact of the Covid-19 pandemic, as it highlighted adjusted earnings before interest, tax, depreciation, and amortization of GBP179 million, up 30% - or GBP41 million - from the same period in 2019. Drax also recorded a GBP224.2 million asset obsolescence charge in the recent half, versus no such charge a year before.
An interim dividend of 6.8p per share was declared, up 6.3% from 6.4p a year ago.
Looking ahead, the Drax said it expects to pay a full-year dividend of 17.1 pence, up 7.5% from 15.9p in 2019. It expects full-year adjusted earnings Ebitda to be in line with market consensus.
In April, it stated it is in line to meet analyst consensus for adjusted earnings before interest, tax, depreciation, amortisation of GBP398 million. This includes a potential hit of GBP60 million in its Customer segment as a result of reduced demand. Adjusted Ebitda for the first half of 2019 was 138 million.
Cash held as at the end of June was GBP481.5 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Drax (DRX)