Drax Group (DRX) Trading Update summary

Financial performance and outlook

• Strong operational performance in FlexGen, Pellet Production, and Biomass Generation, with 2025 Adj. EBITDA expected at the top end of consensus (£848–896m).

• Targeting post-2027 recurring Adj. EBITDA of £600–700 million, reflecting confidence in long-term earnings.

• £300 million share buyback program underway, with £207 million completed and further tranches planned.

• Final 2024 dividend of 15.6p per share proposed, total 2024 dividend up to 26.0p (2023: 23.1p).

• Over £2 billion in contracted forward power sales for 2025–2027, with RO generation fully hedged for 2025 and 90% for 2026.

Operational updates and projects

• £80 million refurbishment at Cruachan Power Station progressing, adding 40MW by 2027 under a 15-year Capacity Market agreement.

• Cruachan II 600MW expansion design completed, but Drax will not participate in the first phase of the cap and floor scheme due to cost and risk concerns.

• Commissioning of three new OCGTs (c.900MW) expected in 2025, delayed by grid connection issues.

• Secured new Capacity Market agreements for 434MW (2028–2029) and 24MW (Glenlee refurbishment, 2028–2043), extending contracted earnings visibility to 2043.

Business development and sustainability

• Sale of Opus Energy SME customer meter points agreed, focusing Energy Solutions on core I&C and renewables services.

• Pellet Production business performing ahead of 2024, aided by favorable weather.

• Drax Power Station continues to provide reliable renewable power, with no major outages planned for 2025.

• Entered a 20-year JV with Power Minerals Limited to process and sell PFA for low-carbon cement, expected to reduce emissions by at least 6Mt and add c.£5m Adj. EBITDA post-2027.