Shares in Drax fell as much as seven per cent this morning after it slid to a half-year loss, but the company said it was making good progress with its strategic initiatives to shift away from coal.
The power company reported a loss before tax of £83m from a profit of £184m the previous year for the six months to 30 June. That includes unrealised losses related to foreign currency hedging of £65m.
Drax made earnings before interest, tax, depreciation and amortisation (Ebitda) of £121m, up from £70m the prior year.
The FTSE 250 company's share price was down 4.06 per cent to 330.40p in morning trading.
Why it's interesting
Drax, which owns and operates the UK's largest coal-fired power station in North Yorkshire, is working to diversify its business and move away from coal to burning compressed wood pellets or biomass as it grapples with a government plan to close all coal plants by 2025.
Drax said its acquisitions of energy supplier Opus Energy and wood pellet facility LaSalle Bioenergy were completed and integrating well. It bought Opus, the business-to-business supplier, for £340m in December to grow its retail arm.
The company's research team is currently developing a proposal to convert one or more of its coal units to gas.
What Drax said
Dorothy Thompson, chief executive of Drax, said:
Central to our strategy is the delivery of targeted growth through deploying our expertise across our markets and, in so doing, diversifying, growing and improving the quality of earnings whilst reducing exposure to commodity market volatility.
Delivering reliable renewable electricity remains at the heart of our business. We continue to produce at record levels, helping to keep the UK's electricity system secure and supplying our customers through our retail business.
With the right conditions, we can do even more. We are progressing our four new rapid response gas power projects and our research and innovation work has identified potentially attractive options to repurpose our remaining coal assets.