Drax expects to beat market forecasts

DRAX, the operator of Britain’s largest coal-fired power station, said yesterday it expects its earnings for the full-year to be slightly ahead of current market consensus.

“While the commodity markets in which we operate remain challenging, as previously described, we benefit from a strong contracted position,” said the business based in Selby, North Yorkshire.

The group, which is led by chief executive Dorothy Thompson, added that it had maintained a high load factor and improved profitability.

It anticipates that earnings before interest, tax, depreciation, amortisation and underlying earnings per share for 2010 will beat the market consensus.

The market consensus for full-year Ebitda for the group currently stands at £376m.

The group will announce its full results on 22 February.

Drax has plans to build three biomass-fired power plants at a cost of £2bn, but investment has been delayed because it wants the government to offer better incentives.

The government is expected to propose what subsidies it will offer for low-carbon projects in an electricity reform paper due this week.