Drax Group (Drax) has released its full year financial results for the 12 months ended 31 December 2022, reporting a strong performance.
Its total profit after tax was £83 million (€94.2m), an increase of 50.9% from 2021, where profit after tax from continuing operations was reported as £55m (€62.4m).
The firm further reported a robust result in earnings before interest, taxes, depreciation and amortisation (EBITDA), which increased by 84% - from £398m (€451.8m) in 2021, to £731m (€829.9) in 2022. It stated its 1.6x net debt to Adjusted EBITDA was significantly below its 2x target.
Pellet production
Drax's adjusted EBITDA for pellet production rose by 56% to £134m (€152m). The equivalent 2021 figure was £86m (€97.6m).
Production went up by 26%, from 3.1Mt to 3.8Mt. The ocmpany also experienced lower-than-planned production delays in achieving full capacity production at new plants, North American rail restrictions and flexible production.
Generation - flexible operations and dispatch
Adjusted EBITDA in this area was £696m (€790.2m) - up 87% (2021: £372m (€422.3m).
The company said that optimisation of generation and logistics to support UK security of supply at times of higher demand supported its performance. For example, in summer 2022 there was lower power demand, lower power generation and sale of reprofiled biomass. In the winter, Drax maximised biomass deliveries to support higher demand. Higher biomass and system costs reflected "a more challenging energy environment".
Of the results, Will Gardiner, CEO of Drax Group, said: "Drax delivered a strong performance in 2022, and played a significant role in ensuring security of supply during a challenging year for the UK’s energy system.
“Our renewable generation – biomass, hydro and pumped storage – are a major source of power in the UK and during periods of peak demand when there was low wind and solar power, these assets collectively supplied up to 70% of the UK’s renewable power in certain periods.
“We believe that BECCS can become a world-leading solution for large-scale high-quality carbon removals and we are seeing increasing global policy support for its delivery.
“Drax stands ready to invest billions of pounds in the development of this technology and, following the introduction of the US Inflation Reduction Act, we are increasingly excited about the opportunities to deploy BECCS in the US. In response, the UK Government should accelerate its policy support for BECCS to make the UK a world leader in carbon removals, while attracting investment and delivering its net zero targets.
“Drax is a growing international business with strong cash returns which we are reinvesting to produce more renewable energy and deliver carbon removals while reducing our own carbon emissions. We aim to be at the heart of the energy transition, creating the jobs, renewable power and large-scale carbon removals that the world needs.”
Drax’s after-tax profits up by 50.9%
