The power generation company said the profit drop was in line with expectations, as it invested heavily in converting its coal power plant to run on biomass.
Higher operating costs, a double planned outage and costs incurred to accelerate biomass plans all hit earnings before interest, tax, depreciation and amortisation (Ebitda), which was down 11 per cent to £298 million.
Dorothy Thompson, chief executive of Drax, said: “Last year was pivotal for Drax. After ten years developing significant knowledge and experience in all aspects of using sustainable biomass in place of coal at our power station, we now have the mandate, means and expertise to transform the business into a predominantly biomass-fuelled generator.”
Drax expects to convert its first unit to biomass in April 2013 and the second in 2014.
Thompson added: “We will be investing significant capital over these two years, as we transform the business. Ebitda in this period will be impacted adversely by the increasing costs of carbon. However, as we move beyond this investment phase and replace substantial quantities of coal with sustainable biomass, we are confident that we will deliver attractive returns for our shareholders, who have provided us with strong support.”
Total dividends for the period came to 25.3 pence per share, down from 27.8 pence per share in 2011.