February 27, 2018 / 8:18 AM / 8 months ago

UPDATE 1-British power producer Drax beats earnings expectations, shares jump

(Updates with details)

Feb 27 (Reuters) - British power producer Drax Group Plc beat full-year core earnings expectations on Tuesday, sending its shares up by as much as 9 percent.

Drax has converted three of its six power plant units in Yorkshire in the north of England - once Europe’s most polluting coal-fired power station - to burn wood pellets.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 63.6 percent to 229 million pounds ($319.87 million) for the year ended Dec. 31, the company said.

That topped the 225.4 million pounds expected by analysts, according to Thomson Reuters I/B/E/S.

Revenue grew by about 25 percent to 3.69 billion pounds, helped by higher profit from its biomass power plants and the acquisition of Opus Energy.

Drax shares rose as much as 9 percent in early trade and were up 7 percent at 255 pence by 0812 GMT.

As well as higher generation and acquisitions, revenue was buoyed by a 35 percent increase in biomass pellet production at the company’s U.S. manufacturing plants.

As a part of its efforts to meet climate targets, Britain plans to close all coal-fired power plants by 2025 unless they are fitted with technology which can capture and store carbon dioxide (CO2) emissions.

Drax plans to convert a fourth unit to biomass by the end of the year and eventually replace its existing coal units with two large gas units.

$1 = 0.7159 pounds Reporting by Arathy S Nair in Bengaluru and Susanna Twidale in London; editing by Subhranshu Sahu and Jason Neely

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