AGM Statement

RNS Number : 7010V

Drax Group PLC

20 April 2016

 

20 April 2016

Drax Group plc

("Drax" or the "Company")

Symbol: DRX

AGM Statement

Drax holds its Annual General Meeting at 11:30am today at The Grocers' Hall, Princes Street, London.  At this meeting Philip Cox, Chairman of Drax, will make the following comments:

"The Annual Report and Accounts were published on 14 March and therefore I hope that you've had time to review them. By way of a reminder, our principal performance indicators and operational achievements for 2015 are summarised on the screen. 

My first year as Chairman has certainly been a challenging one for the Group.  Indeed, for any business operating in the energy sector, 2015 was a tough year.

Our underlying earnings of £169 million were £60 million lower than 2014, but only slightly behind our expectations at the start of the year. Given the numerous challenges faced, not least the dramatic falls in commodity prices as well as the removal of the Levy Exempt Certification scheme, this was a creditable financial performance.

Operationally your business performed strongly and in 2016 we will complete our transformation to a predominantly biomass powered generator. The business we have today is diverse, built on a dedicated supply chain and backed by world-leading innovation and technology. It continues to deliver around 8% of the UK's electricity needs, while providing an excellent service to our retail customers.

2015 was a significant year for regulatory change in the energy sector, culminating in a speech in November by the Secretary of State for Energy, Amber Rudd, where she announced a fixed end date for coal generation in the UK.  To some this was a surprise - not Drax.

Many years ago your company recognised that limiting climate change would require an eventual end to the use of coal generation. It is why we embarked on our biomass transformation more than ten years ago.

In 2010 our power station burnt almost 10 million tonnes of coal. In 2015 this figure was 6 million tonnes. We don't want to keep burning coal and we don't have to.

An increase in the use of sustainably sourced biomass is the fastest, safest and most affordable means by which the UK can move away from coal and support more wind and solar generating capacity in the future.

With the right policy frameworks we could become 100% renewable through the full conversion of our three remaining coal units and we could do this well before 2025. We will continue to work closely with the government to help them reduce the UK's reliance on coal.

I think it important that I also say a few words on sustainability. We are well aware of the obligations we have to society, and specifically the communities in which we are located, as well as the wider environment. 

We take these obligations very seriously. 

And, I'd like to reassure you our shareholders of the following:

•           We only source wood from countries that already have huge working forests where we provide another market for low grade material that local solid-wood industries, such as construction and furniture, aren't using.

•           We never work in countries that lack proper regulation and we require all our suppliers to pass tough screening and sustainability audits, conducted by independent auditors.

•           We never cause deforestation or forest decline.

•           We only take wood from working forests that grow back and stay as forests.

•           We never source from areas that are officially protected or where our activities would harm endangered species.

Drax remains an essential part of the UK energy mix. Our ability to generate reliable, affordable, renewable power and deliver this to a broad range of customers places the Group at the heart of the UK's power generation. In turn, this will create long-term value for our shareholders. Your Board remain focused on optimising this value as well as remaining alert to opportunities for growth.

Finally, I'm sorry to say that Melanie Gee will step down from the Board at the conclusion of this AGM.  On behalf of the Board I should like to thank Melanie for her valuable contribution to Drax over the past three years.  She leaves us with our very best and sincere wishes for her future."

Enquires:

Investor Relations

Mark Strafford        [phone]

Media 

Andrew Brown [phone]

Website: www.drax.com

Notes:

(1)  The principal performance indicators and operational achievements for 2015 which were  "summarised on the screen" were as follows:

During 2015:

®  Total revenue - £3,065 million

(2014: £2,805 million)

®  EBITDA - £169 million

      (2014: £229 million)

®  Gross Profit was £409 million

      (2014: £450 million)

®  Net debt - £187 million

      (2014: £99 million)

®  Underlying basic earnings - 11 pence per share

      (2014: 24 pence per share)

®  Total recordable injury rate - 0.31

      (2014: 0.33)

 

END

 

 

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