UK's Drax first-half profit slides, still expects to meet full-year estimates
Drax's Financial Performance and Strategic Outlook
By Anushka Chourasia
First-Half Results and Market Context
July 30 (Reuters) - British power generator Drax's first-half adjusted core profit slumped on Thursday, but the company maintained its full-year outlook, betting on growth in battery storage and flexible generation driven by data centre demand.
UK Energy Sector Developments
• Britain is seeking to expand AI and data centre infrastructure, while accelerating renewable energy capacity buildup, as it aims to meet the sharp increase in electricity demand and hit climate targets.
CEO Perspective on Investment Climate
• CEO Will Gardiner told Reuters the most important thing new Prime Minister Andy Burnham and his government could do for the power sector was to ensure conditions remained consistent and attractive for investors.
UK as an Energy Investment Destination
• "On an international scale, the UK is a very attractive place for energy investment. And that's because the system has been clear and attractive for investment for some time," Gardiner said.
Drax's Profit Figures and Market Reaction
• Drax's adjusted core profit fell 39% to £279 million ($372.3 million) for the six months to June, weighed down by lower prices at its biomass generation unit.
• Shares of the company were down 1.6% at 0830 GMT.
Full-Year Outlook and Future Targets
• The company said that it expects full-year earnings in line with market consensus of £665 million, which excludes Drax's acquisition of Bluefield Solar Income Fund.
• Drax is also targeting adjusted core profit of £650 million-£800 million in 2029, against post-2027 targets of £600 million-£700 million it had set previously.
Expansion Plans and Acquisitions
• Gardiner also said the company plans to submit an application in the second half of the year for an initial 100-megawatt facility at its data centre in Selby.
• Separately, Drax said its Bluefield acquisition had cleared the final UK national security hurdle, with the deal now expected to complete on July 31.
Additional Information
($1 = 0.7494 pounds)
(Reporting by Anushka Chourasia in Bengaluru; Editing by Harikrishan Nair and Subhranshu Sahu)
