UK power firm Drax beats profit expectations on strong pellet production (updated)
26/02/2026 07:48
Drax raises dividend by 11.5% to 29 pence per share 2026 EBITDA expected to align with market forecasts Shares hit their highest level since August 2006 Updates with share move and milestone in paragraph 1 & 5, adds CEO comments in 6,9, details throughout Feb 26 (Reuters) - British power company Drax DRX.L beat annual profit expectations and raised its dividend on Thursday, driven by strong pellet output in North America and record renewable generation, lifting shares to a near two-decade high. Drax has benefited from elevated wholesale power prices in recent years, especially after the Russia–Ukraine war. The company raised its full-year dividend by 11.5% to 29 pence per share, and forecast 2026 core earnings in line with the market view. Drax reported core earnings of 947 million pounds ($1.28 billion) for the 12 months ended December 31, 2025, down almost 11% from a year ago but still ahead of analysts' forecast of 914 million pounds on average, according to company-compiled consensus. Its shares hit their highest level since August 2006, before paring some gains to trade up 3.5% at 913 pence. STRATEGIC TRANSITION CEO Will Gardiner told Reuters he expects core profit between 600–700 million pounds in 2027 as Drax moves onto the UK’s updated low‑carbon support regime, with earnings expected to grow from there. The company booked a 378 million pound non‑cash impairment charge in 2025, mostly related to its Canadian operations, for which it is reviewing strategic options. Drax has already said it may cut more than 350 roles . Gardiner said on Thursday that jobs created as a result of its planned data centre project will depend on the scale of investment by the developer and customer. On the subject of artificial intelligence, Gardiner said: "As a supplier of power, we have a huge opportunity. AI is power. And so the opportunity for us to supply customers in that space is very interesting." ($1 = 0.7390 pounds) (Reporting by Ankita Bora in Bengaluru; Editing by Subhranshu Sahu and Louise Heavens) ((Ankita.Bora@thomsonreuters.com))