Drax Group PLC (LON:DRX) said it will pay the promised 9.5p dividend as profits for 2020 remain on target despite a £60mln potential impact from the coronavirus (COVID-19) lockdown due to lower power demand and increased customer bad debt risk.
Demand for its biomass, gas and coal-burning power remains “robust”, the FTSE 250-listed group said in an update, along with support from contracted forward power sales for coming years.
Lower Renewables Obligation Certificate (ROC) recycle prices in generation had been partially offset by system support services, it added.
With underlying profits (EBITDA) on track for the year and a balance sheet at March 31 showing net debt of £818mln but available cash and committed facilities of £663mln, the decision on the £37mln final dividend payment will be put to a shareholder vote at the annual meeting later in the day.
Drax chief executive Will Gardiner said: "With our strong balance sheet, robust trading and operational performance, and resilient sustainable biomass supply chain, Drax is in a strong position to support its employees, business customers and communities during the COVID-19 crisis, while continuing to generate returns for shareholders.”
Drax shares rose more than 7% to 211.8p on Wednesday morning, still down 32% since the start of the year but well off lows around seen 120p last month.