Operating profits have fallen at energy generator Drax s the FTSE250 firm says it is closer to agreeing a deal with the Government over the running of its North Yorkshire plant.
The power company saw operating profit fall to £301m in the six months to the end of June, compared with £518m in the same period last year. Total revenue was also down, from more than £3.1bn to £2.64bn.
Bosses have decided to extend a share buyback programme by £450m over a three year period. A £300m share buyback is already under way with about £272m already completed.
Within half year results, Drax said it is in talks with the Government and expects to finalise a Contract for Difference (CfD) deal later this year. It follows the completion of a Competition and Markets Authority review of government process for CfD compatibility with subsidy control this month.
Capital investment across the business was substantially down, from £141m to £59m. This year Drax expects to invest between £150m to £190m.
Drax Group CEO, Will Gardiner, told investors on the London Stock Exchange: "Drax is the leading dispatchable renewable power company in the º£½ÇÊÓƵ, delivering 5% of the º£½ÇÊÓƵ's power and significantly more when the system needs it. Thousands of our colleagues at Drax and in our supply chain work tirelessly to ensure our assets continue to help keep the lights on for millions of this country's households and countless businesses, no matter the weather.
"During the first half of the year, we made significant progress towards ensuring we continue to play an important role in º£½ÇÊÓƵ energy security through this decade and beyond, reaching a heads of terms with the º£½ÇÊÓƵ Government on a low-carbon dispatchable Contract for Difference. We expect to sign a final agreement later this year and look forward to continuing to play a critical role in the º£½ÇÊÓƵ system into the future.
"Across the Group we are confident in our ability to generate significant free cash flow through 2031 and are focused on aligning the business to deliver. The energy transition is creating significant value opportunities aligned with the º£½ÇÊÓƵ's energy needs and we will continue to explore investing in those in a disciplined fashion consistent with our capital allocation policy."
