Drax Group cuts 2012 dividend by 8.9%

DividendMax Ltd.

Drax Group cuts 2012 dividend by 8.9%

Financial and Operational Highlights

2012 profits in line with expectations - continued strength in operations

27.1TWh - record output

Financing to support growth plans secured

Strong balance sheet - £311 million net cash at 31 December 2012

Biomass Highlights

Biomass transformation well underway:

First unit will be converted to biomass in April 2013; second unit planned for 2014

On-site biomass storage and handling construction on track

Good progress securing fuel and logistics for first two unit conversions

Dorothy Thompson, Chief Executive of Drax, said:

"Last year was pivotal for Drax.  After ten years developing significant knowledge and experience in all aspects of using sustainable biomass in place of coal at our power station, we now have the mandate, means and expertise to transform the business into a predominantly biomass-fuelled generator.  

"With Government support and our financing secured, both in the second half of 2012, we are on track to convert our first generating unit fully to biomass in April of this year, with the second to follow in 2014.

"We will be investing significant capital over these two years, as we transform the business. EBITDA in this period will be impacted adversely by the increasing costs of carbon. However, as we move beyond this investment phase and replace substantial quantities of coal with sustainable biomass, we are confident that we will deliver attractive returns for our shareholders, who have provided us with strong support.

"This transformation will also provide reliable, cost effective renewable power for consumers and secure a significant number of jobs both at Drax and throughout our supply chain."

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