Full Year 2024 Drax Group PLC Earnings Call Transcript
Key Points
- Drax Group PLC (DRXGF) reported a 5% increase in adjusted EBITDA, driven by a 25% increase in power production and improved Pellet production.
- The company announced a 12.68% increase in dividends per share and continued with a GBP300 million share buyback, reflecting confidence in the business's value.
- Drax Group PLC (DRXGF) secured GBP700 million of new debt at attractive rates, extending maturity beyond 2027, which strengthens the balance sheet.
- The company is targeting GBP600 million to GBP700 million of recurring adjusted EBITDA post-2027 from its FlexGen, Pellet production, and biomass generation businesses.
- Drax Group PLC (DRXGF) is exploring long-term growth opportunities aligned with the energy transition, including investments in data centers and carbon removals through its new business, Elimini.
- The commissioning of the OCGTs has been significantly delayed due to grid connection issues, impacting the timeline for these assets.
- There is uncertainty surrounding the UK government's review of greenhouse gas removal technologies, which affects the company's BECCS projects.
- The potential move to zonal pricing under REMA creates uncertainty for new investments, particularly impacting the Cruachan expansion project.
- Drax Group PLC (DRXGF) faces a potential short-term oversupply of Pellets post-2027, which could impact pricing and margins.
- The company's long-term investments, such as in carbon removals and data centers, are subject to regulatory and market uncertainties, requiring careful capital allocation.
(spoken by AI). This presentation will commence shortly.
Ladies and gentlemen, welcome to the Drax results 2024. My name is [Vicky] and I will be the operator for your call this morning. (Operator Instructions)
I will now hand over to Will Gardiner, CEO. Please go ahead, sir.
Thank you and good morning everyone and thank you all for joining the call. I'm going to provide a short introduction and overview and I'll hand over to Andy who'll take you through the numbers and some of the operating points, and then I'll come back to talk about some of our investment opportunities and more about capital allocations, and we'll finish up the questions.
Now on page 3. You're all familiar with our purpose, which is to enable a zero carbon lower cost energy future. I'll start with that, as I always do as it guides fundamentally everything that we do. A strategy and business model are designed to deliver attractive returns for shareholders while realizing that
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