Drax reports higher revenues

Drax the operator of Britain’s largest coal-fired power station, reported higher revenue for the full year as the cold weather boosted power sales, but warned higher coal prices could pressure margins.

Drax, whose coal-fired power station in North Yorkshire supplies about seven per cent of Britain’s electricity, said revenue was up 12 per cent to £1.65bn in 2010, comfortably beating the average forecast of £1.47bn.

“Coal prices started to increase in the last months of the year as a result of supply constraints in the Pacific market due to severe weather conditions, particularly in Australia, coupled with strong Asian demand,” the company said.

The company said EBITDA (earnings before interest, tax, depreciation and amortisation) was £391m, above the average forecast of £380.1m.

Drax said pre-tax profit rose 61 per cent to £255m ($413.7 million), but fell short of analysts’ estimates of £305.2m.

In December, Drax had said full-year EBITDA and underlying earnings per share would be slightly ahead of consensus views at the time.

Shares in the company closed at 394.9 pence on Monday on the London Stock Exchange, valuing the business at £1.44bn.