Half Year 2024 Drax Group PLC Earnings Call Transcript
Key Points
- Drax Group PLC (DRXGF) reported a 24% increase in adjusted EBITDA and a 43% increase in earnings per share, indicating strong financial performance.
- The company announced a GBP300 million two-year share buyback program, reflecting confidence in its financial stability and commitment to returning value to shareholders.
- Drax Group PLC (DRXGF) has significantly strengthened its balance sheet by raising over GBP680 million in new facilities and repaying about GBP950 million of shorter-dated facilities.
- The FlexGen and Pellet businesses are performing well, with both targeting more than GBP250 million of EBITDA in the long term.
- The company is actively engaging with the UK government to support its role in delivering a net zero power system by 2030, highlighting its strategic importance in the energy transition.
- There are challenges with the timing of the Open Cycle Gas Turbines (OCGT) projects, with delays in grid connections pushing commissioning dates into 2025.
- The company faces uncertainties regarding the UK government's bridging mechanism for BECCS, which could impact future investments.
- Drax Group PLC (DRXGF) is exiting its non-core SME business, reflecting a strategic shift but also indicating challenges in that segment.
- The company is still working through permitting processes for its Longview Pellet plant, which has slowed progress.
- There is ongoing uncertainty regarding the outcome of the Ofgem investigation, which could have regulatory implications for the company.
Thank you, and good morning, everyone, and welcome to our first half 2024 results call.
I'm starting on page 3. I'll start with our purpose, which is to enable a zero-carbon, lower-cost energy future. And now we'd like to do that because it guides fundamentally everything that we do. And we have a business model that aligns shareholder returns for the positive outcomes for nature, the climate, and people and critically, our people are at the heart of Drax, where I want everyone to feel a valued member on a winning team for the worthwhile mission.
Turning to page 4. And again, as I always like to do, I'll start with safety, which is again at the heart of everything that we do. We pay a lot of attention to safety all the time. It's not really about the statistics. It's about the culture that we are trying to build. But the statistics do tell a story and compared to last year, we've had significantly fewer incidents and our TRIR has reduced from 0.47 last year to 0.2 for this year. But as we all know, keeping
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