Drax Group (DRX) H2 2025 earnings summary

Executive summary

• Delivered strong operational and financial performance in 2025, with record renewable and pellet production, robust cash generation, and support for growth and shareholder returns.

• Advanced strategic priorities, including preparing for the low-carbon dispatchable CfD regime, investing in the U.K. energy transition, expanding FlexGen and battery storage, and acquiring a 260MW BESS portfolio.

• Signed a low-carbon dispatchable CfD for Drax Power Station, marking a strategic inflection point for future earnings visibility.

• Targeting post-2027 adjusted EBITDA of GBP 600–700 million per annum and GBP 3 billion free cash flow from 2025–2031, with GBP 0.5 billion delivered in 2025.

• Over GBP 1 billion returned to shareholders and up to GBP 2 billion available for further investment in growth.

Financial highlights

• Adjusted EBITDA reached GBP 947 million in 2025, driven by strong December market conditions and record 15 TWh biomass power production.

• Adjusted EPS rose to GBP 137.7, supported by share buybacks and lower net finance costs.

• Net debt reduced to GBP 784 million (0.8x EBITDA), with cash and facilities at GBP 942 million.

• Full-year dividend of GBP 0.29 per share, up from GBP 0.26 in 2024.

• GBP 300 million share buyback completed, with a new GBP 450 million program underway.

Outlook and guidance

• Targeting post-2027 Adjusted EBITDA of GBP 600–700 million per annum across pellet production, biomass generation, and FlexGen.

• Expecting GBP 3 billion free cash flow between 2025 and 2031, with over GBP 1 billion allocated to shareholder returns and up to GBP 2 billion for growth investments.

• FlexGen expected to comprise a greater share of EBITDA mix over time.

• BESS (battery storage) investments not yet included in medium-term guidance; update expected later in the year.

• Forward power sales of GBP 1 billion underpin earnings through Q1-27, with 13.3TWh contracted at an average price of GBP 78/MWh.