TIDMDRX
RNS Number : 4477C
Drax Group PLC
13 April 2017
13 April 2017
Drax Group plc
("Drax" or the "Company")
Symbol: DRX
AGM Statement
Drax holds its Annual General Meeting at 11:30am today at The
Grand Hotel and Spa, Station Rise, York. At this meeting Philip
Cox, Chairman of Drax, will make the following comments:
"The Annual Report and Accounts were published on 10 March and
therefore I hope that you've had time to review them. By way of a
reminder, our principal performance indicators and operational
achievements for 2016 are summarised on the screen.
2016 was a pivotal year for Drax, marking the completion of the
biomass transformation project which commenced in 2012, and the
announcement of a new strategy to deliver long-term sustainable
value for our shareholders.
Our underlying earnings for 2016 at GBP140 million was in line
with our guidance, although GBP29 million below 2015. This reflects
the continuation of challenging commodity markets and the removal
of Climate Change Levy (CCL) exemptions. However, we were pleased
to be able to partly offset the impact of these factors with a
focus on flexible system support, the prompt and balancing markets,
ancillary services and improving retail margins, all of which are
important parts of our strategy to develop broader, non-commodity
exposed earnings.
Against a background of low wholesale electricity prices, the
Group has again delivered strong operational performance. This is
not something we take for granted and it remains at the core of our
strategy.
Following a comprehensive review, initiated in 2015, the Group's
new strategy has been defined and is based on creating a more
diversified earnings base that will produce higher-quality returns
in the long term.
Central to this strategy, Drax aims to play an increasing role
in the way energy is generated, supplied and used for a better
future. We announced our new strategy to the market in December.
Evidence of delivering on the new strategy can already be seen in
the acquisition of Opus Energy and four projects to develop
rapid-response Open Cycle Gas Turbine (OCGT) generation plants and
most recently we have made progress in our plans to expand our
biomass pellet self-supply capability with the provisional
acquisition of a new biomass pellet plant in Louisiana.
Sustainably sourced biomass generation remains at the heart of
your business and we were delighted to be able to complete the full
conversion of our third biomass generating unit, resulting in Drax
delivering 16 per cent of the UK's renewable electricity.
Biomass is the most cost-effective large scale renewable and
with the right policy frameworks we could become 100% renewable
through the full conversion of our three remaining coal units and
we could do this well before 2025, supporting the Government's
objective to remove unabated coal from the system.
Through our strategy your Board remain focused on optimising the
value of the Group as well as remaining alert to opportunities for
growth.
The sustainable biomass we use to provide energy is at the heart
of our business. Because this must be sustainable we always strive
to ensure all our pellets comply with our policy. We are well aware
of the obligations we have to society, and specifically the
communities in which we are located, as well as the wider
environment.
We take these obligations very seriously.
And, I'd like to remind you our shareholders of our guiding
principles:
-- We never work in countries that lack proper regulation.
-- We never cause deforestation or forest decline.
-- We never source from areas that are officially protected or
where our activities would harm endangered species.
-- We only take wood from working forests that grow back and stay as forests.
-- We require all our suppliers to pass tough screening and
sustainability audits, conducted by independent auditors.
-- We only source wood from countries that already have huge
working forests where we provide another market for low grade
material that solid-wood industries, such as construction and
furniture manufacture, aren't using.
This year there are a larger number of resolutions than usual as
a result of the submission of a new Remuneration Policy for
consideration by shareholders and a number of other resolutions as
set out in the Notice of Meeting. Following comments by shareholder
advisory bodies and discussions with major shareholders, I want to
be clear that all payments and awards made to directors are in line
with our remuneration policy, although I acknowledge that some
elements of remuneration structure could have been better explained
in the previous year's Directors' Remuneration Report."
Enquires:
Investor Relations
Mark Strafford +44 (0) 1757 612491
Media
Paul Hodgson +44 (0) 1757 612026
Website: www.drax.com
Notes:
Notes:
(1) The principal performance indicators and operational
achievements for 2016 which were "summarised on the screen" were as
follows:
During 2016:
(R) Total revenue - GBP2,950 million
(2015: GBP3,065 million)
(R) Gross Profit was GBP376 million
(2015: GBP409 million)
(R) EBITDA - GBP140 million
(2015: GBP169 million)
(R) Net debt - GBP93 million
(2015: GBP187 million)
(R) Underlying basic earnings - 5 pence per share
(2015: 11 pence per share)
(R) Total recordable injury rate - 0.22
(2015: 0.31)
(R) Percentage of UK renewable electricity generated - 16%
(1)
(2015: 16%)
(R) Biomass generation - 65%
(2015: 43%)
(Note)
(1) Drax estimates that it produced around 16% of the renewable
electricity generated under support schemes covered by the Levy
Control Framework.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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