Drax Group Plc DRX Interim Management Statement

  Drax Group Plc (DRX) - Interim Management Statement

RNS Number : 5034P
Drax Group PLC
25 October 2012
 



25 October 2012

                                Drax Group plc

                           ("Drax" or the "Group")

                                       

                                  Symbol:DRX

 

                         Interim Management Statement

                                       

Drax today publishes its  interim management statement for  the period from  1 
July 2012 to date.

 

Trading Performance

Since publishing our half year results  on 31 July, trading conditions in  the 
commodity markets in which we operate have improved, except for domestic coal,
where some of our suppliers continue to face challenges.

 

Although virtually fully hedged for 2012 at the time of our half year results,
we have taken advantage of better dark green spreads since then to  strengthen 
our contracted position, including additional power sales of 3.5TWh and 2.9TWh
for 2013  and  2014 respectively.  We  have  also continued  to  deliver  good 
operating performance.

 

These factors currently  underpin our  expectations for the  full year,  which 
remain unchanged.

 

Positions Under Contract for 2012, 2013 and 2014

As at 19 October 2012, positions under  contract for 2012, 2013 and 2014  were 
as follows:

 

                                                        2012     2013     2014
Power sales (TWh) comprising:                           26.9     20.3      7.3
- Fixed price power sales (TWh)                         25.3     17.7      4.7
 at an average achieved price (per MWh) ^(1)        at £51.5 at £51.8 at £54.1
- Fixed margin and structured power sales (TWh)          1.6      2.6      2.6
^(2)
CO[2] emissions allowances hedged, including UK NAP
                                                        27.5     20.4      7.1
allocation, market purchases, structured contracts,
and benefit of biomass (TWh equivalent)
Solid fuel at fixed price/hedged, including
structured                                              27.2     22.9     13.4

contracts (TWh equivalent)

 

 

Notes to Positions Under Contract:

(1)   Fixed  price  power  sales  include  approximately  6.3TWh  supplied  to 
Centrica in the period 1 January 2012 to  19 October 2012 under the five and  a 
quarter year 600MW baseload contract which commenced on 1 October 2007 and the
five year 300MW baseload contract which commenced on 1 October 2010.

 

(2)   Fixed margin and structured power sales include approximately 1.6TWh  in 
2012 and 2.6TWh both in 2013 and 2014 in connection with the above  contracts. 
 Under these contracts  the Group  will supply  power on  terms which  include 
Centrica paying for coal, based  on international coal prices, and  delivering 
matching CO[2] emissions  allowances amounting in  aggregate to  approximately 
7.2 million tonnes in 2012  and 2.4 million tonnes in  each of 2013 and  2014. 
 The contracts provide  the Group with  a series of  fixed dark green  spreads, 
with the spreads in the first contract having been agreed in the first  quarter 
of 2006 and with those  in the second contract  having been agreed in  October 
2009.

 

We will next update the market on  the Group's positions under contract on  19 
February 2013, when we announce our preliminary results for the year ending 31
December 2012. 

 

Placing

In a separate  announcement issued  today, we have  set out  our intention  to 
raise approximately £180 million via a placing of new ordinary shares. We have
previously announced  our intention  to transform  Drax into  a  predominantly 
biomass-fuelled generator. The  proposed placing  is an integral  part of  the 
funding for the £650 million to  £700 million capital investment required  for 
this transformation.

 

Other than as described in the separate announcement issued today, there  have 
been no  material events  or  transactions, nor  any  material change  in  the 
underlying financial position of the Group during the period.

 

 

                           ~~~~~~~~~~~~~~~~~~~~~~~

 

Enquiries:

Drax Investor Relations: Michael Scott

+44 (0) 1757 612 230

 

Media:

Drax External Affairs: Melanie Wedgbury

+44 (0) 1757 612 438

 

Brunswick: Michael Harrison

+44 (0) 207 404 5959

 

Website: www.draxgroup.plc.uk

 

END

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IMSBKPDBPBDKOKB -0- Oct/25/2012 06:00 GMT