Drax, the power company, announced a 64 per cent jump in pre-tax earnings on Tuesday, boosted by a strong performance from its biomass business.
The company reported earnings before interest, tax, depreciation and amortisation (ebitda) of £229m for the year to the end of December 2017, up from £140m the year before.
Profit before tax, however, was adversely affected by higher depreciation charges, as well as one-off costs associated with the acquisition of a business energy supplier, Opus Energy, and led to a loss of £183m. Earnings per share fell to a loss of 37.2p, down from 47.7p, due in part to unrealised losses on derivative contracts.
The company will pay a final dividend of 12.3p a share. It also announced a £50m share buyback programme.
Drax has spent the past few years converting half its six generating units to burn wood pellets instead of coal. It has also submitted a planning application to convert two of its coal-fired units to gas, as the UK works towards a deadline of 2025 to phase out coal-fired generation.
Will Gardiner, who took over as chief executive from long-serving Dorothy Thompson last year and was previously Drax’s chief financial officer, said: “We continued to transform the business in 2017, delivering strong EBITDA performance, in line with expectations. This was delivered by all parts of the business making positive contributions for the first time.”