Drax Group plc (DRXGF) Q4 2024 Earnings Call Transcript

2025-02-28 18:18:05 ET

Drax Group plc (DRXGF)

Q4 2024 Results Conference Call

February 27, 2025 04:00 AM ET

Company Participants

Will Gardiner - CEO & Executive Director

Andrew Skelton - Chief Financial Officer

Conference Call Participants

Dominic Nash - Barclays

Pavan Mahbubani - JPMorgan

Harrison Williams - Morgan Stanley

Alex Wheeler - RBC

Adam Forsyth - Longspur Capital

Charles Swabey - HSBC

Presentation

Will Gardiner

Thank you, and good morning, everyone, and thank you all for joining the call. I'm going to provide a short introduction and overview, and then I'll hand over to Andy, who will take you through the numbers and some of the operating points. And then I'll come back to talk about some of our investment opportunities and more about capital allocation, and we'll finish up with questions.

Now on Page 3. You're all familiar with our purpose, which is to enable a zero-carbon, lower-cost energy future. I'll start with that, as I always do, as it guides fundamentally everything that we do. Our strategy and business model are designed to deliver attractive returns for shareholders while realizing that purpose. We have a strong core cash-generative business that has a track record of achieving those joint objectives.

Now looking to the future, we have opportunities to invest in that core business to enhance shareholder returns as well as deliver positive outcomes for climate, nature, and people. And critically, our people are at the heart of Drax, where I want everyone to feel a valued member on a winning team with a worthwhile mission.

So turning to Page 4. We have had a strong year. Good safety performance is critical in its own right and also underpins good operating and financial performance. So I was pleased that our total recordable injury rate reduced in 2024 from 0.38 in '23 to 0.24. We produced 25% more power than we did in 2023, which combined with a strong improvement in pellet production has driven a 5% increase in adjusted EBITDA.

We significantly strengthened our balance sheet, adding GBP 700 million of new debt that matures in 2027 and beyond at attractive rates, which reflects the market's confidence in our long-term business. We used those proceeds to repay about GBP 900 million of shorter-dated facilities. We're committed to shareholder return, and we're delivering those through the disciplined application of our capital allocation policy. We're announcing today a 12.6% increase in our dividends per share, and we continue with a GBP 300 million share buyback, which reflects our belief in the value we see in the business....

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