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UK power firm Drax beats profit expectations on strong pellet production

Published by Global Banking & Finance Review®

Posted on February 26, 2026

2 min read

Last updated: February 26, 2026

UK power firm Drax beats profit expectations on strong pellet production - Finance news and analysis from Global Banking & Finance Review

Tags:renewable energy

Quick Summary

Drax beat 2025 profit forecasts as pellet output lifted earnings and renewable generation hit records. It will restructure, take a Canada impairment, raise the dividend to 29p and keep 2026 EBITDA guidance in line.

Drax Tops Profit Forecasts as North American Pellet Output Rises

Earnings Drivers and Outlook

Feb 26 (Reuters) - British power company Drax Group beat annual profit expectations on Thursday, helped by strong pellet production in North America, and said it generated more renewable power in 2025 than ever before.

Restructuring and Strategy Shift

Drax has started a restructuring to align its organisation and cost base with its evolving strategy, including planned job cuts and a shift towards flexible power generation, battery storage and potential data-centre projects.

Impairment in Canada

The company booked 378 million pounds in non‑cash impairment charge, citing a more challenging outlook for its Canadian operations as it reviews strategic options to maximise value.

Dividend and 2026 Guidance

It raised its full-year dividend by 11.5% to 29 pence per share, and said it sees 2026 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in line with market view.

2025 EBITDA vs Consensus

Pellet Production Boosts Results

For 2025, Drax reported adjusted EBITDA of 947 million pounds ($1.28 billion), above the 914 million pounds expected by analysts, according to a company-compiled consensus.

FX Rate Used

($1 = 0.7378 pounds)

Reporting Credits

(Reporting by Ankita Bora in Bengaluru; Editing by Subhranshu Sahu)

Key Takeaways

•Adjusted EBITDA for 2025 came in at £947 million, topping the £914 million consensus.
•Strong North American pellet production helped deliver record renewable generation in 2025.
•Drax will restructure with planned job cuts and pivot toward flexible generation, batteries and potential data centers.
•A £378 million non‑cash impairment reflects a tougher outlook for Canadian operations.
•Dividend raised 11.5% to 29p per share; 2026 adjusted EBITDA seen in line with market views.

Frequently Asked Questions about UK power firm Drax beats profit expectations on strong pellet production

1What is the main topic?

Drax reported stronger-than-expected 2025 results, driven by North American pellet production and record renewable output, alongside a restructuring and dividend increase.

2How did Drax perform versus expectations?

Adjusted EBITDA was £947 million for 2025, beating the company-compiled analyst consensus of £914 million, reflecting improved pellet production and operations.

3What strategic changes did Drax announce?

Drax is restructuring with job cuts and shifting focus to flexible power generation, battery storage and potential data-centre projects, while also recording a £378 million Canadian impairment.

Earnings Drivers and Outlook

Restructuring and Strategy Shift

Impairment in Canada

The company booked 378 million pounds in non‑cash impairment charge, citing a more challenging outlook for its Canadian operations as it reviews strategic options to maximise value.

Dividend and 2026 Guidance

It raised its full-year dividend by 11.5% to 29 pence per share, and said it sees 2026 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in line with market view.

2025 EBITDA vs Consensus

Pellet Production Boosts Results

For 2025, Drax reported adjusted EBITDA of 947 million pounds ($1.28 billion), above the 914 million pounds expected by analysts, according to a company-compiled consensus.

FX Rate Used

($1 = 0.7378 pounds)

Reporting Credits

(Reporting by Ankita Bora in Bengaluru; Editing by Subhranshu Sahu)

Key Takeaways

•Adjusted EBITDA for 2025 came in at £947 million, topping the £914 million consensus.

•Strong North American pellet production helped deliver record renewable generation in 2025.

•Drax will restructure with planned job cuts and pivot toward flexible generation, batteries and potential data centers.

•A £378 million non‑cash impairment reflects a tougher outlook for Canadian operations.

•Dividend raised 11.5% to 29p per share; 2026 adjusted EBITDA seen in line with market views.

Frequently Asked Questions

1What is the main topic?

Drax reported stronger-than-expected 2025 results, driven by North American pellet production and record renewable output, alongside a restructuring and dividend increase.

2How did Drax perform versus expectations?

Adjusted EBITDA was £947 million for 2025, beating the company-compiled analyst consensus of £914 million, reflecting improved pellet production and operations.

3What strategic changes did Drax announce?

Drax is restructuring with job cuts and shifting focus to flexible power generation, battery storage and potential data-centre projects, while also recording a £378 million Canadian impairment.