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Drax hails 2021 as “transformational year” for the company

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Drax Group said 2021 was a “transformational year” for the company in its full-year financial results.

The organisation reported adjusted EBITDA of £398 million (€477 million), compared to £412 million (€493 million) in 2020. Adjusted EBITDA from continuing operations was £378 million (€453 million), up from £366 million (€438 million) in 2020. Pre-tax profits from continuing operations rose to £122 million (€146 million) from a loss of £235 million (€281 million) in 2020.

Drax reported a smaller than expected drop in annual profit, despite challenges surrounding Covid and supply chain issues. The company increased its total dividend by 10% to £0.18.8 (€0.21) per share after its adjusted EBITDA came in ahead of estimates.

Drax acquired Pinnacle Renewable Energy for around $385 million (€343 million) last year and confirmed the sale of its Combined Cycle Gas Turbine generation assets for £186 million (€223 million).

Wood pellet production by Drax increased by 107% to 3.1 million tonnes, compared to 1.5 million tonnes in 2020, with 1.2 million tonnes of sales to third parties and increased own-use. In the US Southeast, Drax has added 0.6 million tonnes of new production capacity, through the completion of its LaSalle and Morehouse plant expansions; the commissioning of Demopolis and its first satellite plant (Leola), and the commencement of construction of its second satellite plant (Russellville).

“2021 was a transformational year for Drax as we became the world’s leading sustainable biomass generation and supply company, while continuing to invest in delivering positive outcomes for the climate, nature and people,” said Will Gardiner, Drax Group CEO.

“Over the past 10 years, Drax has invested over £2 billion (€2.39 billion) in renewable energy and has plans to invest a further £3 billion (€3.59 billion) this decade, supporting the global transition to a low-carbon economy. Our investment has reduced our emissions from power generation by over 95% and we are the UK’s largest producer by output.

“We are proud to be one of the lowest carbon intensity power generators in Europe – a significant transformation from being the largest coal power station in Western Europe.

“We have significantly advanced our plans for BECCS in the UK and globally. By 2030, we aim to deliver 12 million tonnes of negative emissions and lead the world in providing a critical technology which scientists agree is key to delivering the global transition to net zero.”

Drax is now targeting 8 million tonnes per annum (tpa) pellet production capacity and 4 million tpa of biomass sales to third parties by 2030.