Selby-based energy company, Drax, has reported rocketing profits, with the pretax profit increasing ten-fold in 2023.

A raft of strong financial figures comes as the company has come under fire over its continued use of wood chips and it continuing to enjoy massive government subsidies for their use.

Profit before tax increased substantially from £78 million in 2022 to £796 million in the year to December 31 2023.

Its operating profit increased substantially to £908million, up from £146 million in 2022.

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The adjusted EBITDA (excluding Electricity Generator Levy) surged to £1,214m, marking a 66% increase compared to the £731 million of previous year.

Drax also reported basic earnings per share (EPS) increasing to 119.6 pence from 85.1 pence, while the declared dividend per share increased to 23.1 pence from 21.0 pence in 2022.

Drax also proposed a final dividend of 13.9 pence per share, a 10% increase from last year.

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The company’s wood-burning plant at Selby, Yorkshire, generated most of the company’s earnings.  

The Selby plant enjoys generous government subsidies, with the company receiving a reported £6.5bn to date.

However, the Selby plan has attracted widespread criticism from environmentalists because it burns wood-chips imported from North American forests.

This week, BBC’s Panorama reported on the continued use of such wood chips.

The law firm Mishcon de Reya also announced it was eyeing a group action against Drax, saying that ‘misleading’ claims from Drax about the sustainability of wood pellets had generated negative headlines and caused a sharp reduction in the share price.

However, Drax argues that using wood pellets are a sustainable method of energy generation.

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The Selby plant is vital to the UK’s energy security because it generates more than 4pc of the nation’s electricity.

It also provides grid stability because it can be fired up during periods when low winds and a lack of sunshine mean little power can come from wind and solar.

Drax’s other main asset is a hydroelectric facility at Cruachan in the Scottish highlands.

Will Gardiner, CEO, said: “Drax performed strongly in 2023 and we remained the single largest provider of renewable power by output in the UK.

“We have created a business which plays an essential role in supporting energy security, providing dispatchable, renewable power for millions of homes and businesses, particularly during periods of peak demand when there is low wind and solar power.

“Policy support for our UK BECCS (Bioenergy with carbon capture and storage) project continues to progress and we remain in formal discussions with the UK Government to ensure Drax Power Station can play a long-term role in UK energy security, creating thousands of jobs during construction and helping the country reach Net Zero.

“We have made further progress in our ambition to be a world leader in carbon removals and have visibility of high-quality, long-term earnings to 2042 and a strong balance sheet which supports returns to shareholders and investment in growth, both in the UK and internationally.”