Published by Global Banking & Finance Review®
Posted on February 26, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleDrax 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.
Feb 26 (Reuters) - British power company Drax 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)
Drax reported stronger-than-expected 2025 results, driven by North American pellet production and record renewable output, alongside a restructuring and dividend increase.
Adjusted EBITDA was £947 million for 2025, beating the company-compiled analyst consensus of £914 million, reflecting improved pellet production and operations.
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.
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