Drax's full-year performance exceeds expectations, reaffirming mid-term goals

Investing.com - Drax PLC (LON:DRX) announced its full-year results for fiscal year 2025 on Thursday, surpassing analyst expectations with an EBITDA of £947 million, 4% above market forecasts.

The company reported earnings per share of 137.7 pence, 11% higher than expected. The better-than-expected performance was attributed to favorable conditions in biomass power generation in December, supported by pricing, output, and pellet production.

Lower financing costs and the impact of share buybacks also contributed to the outperformance.

Drax declared a dividend of 29 pence per share, in line with analyst expectations. The company completed a £300 million share buyback program in October 2025 and is currently executing another three-year, £450 million buyback plan.

Net debt for the full year 2025 stood at £784 million, with a leverage ratio of 0.8x.

For 2026, the company provided an EBITDA guidance of £662 million, in line with market expectations.

Drax reaffirmed its target EBITDA range of £600 million to £700 million after 2027, excluding development expenditures and the recent value-added acquisitions of battery storage systems and optimization, which could add approximately £100 million in 2027 and 2028.

The company outlined capital expenditure plans of approximately £210 million to £250 million for 2026, including £130 million for maintenance capital and £100 million for growth capital, mainly allocated to battery storage systems, Cruachan water inlet valve upgrades, supergrid transformers, and open-cycle gas turbines.

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