Feb 24 (Reuters) - British power generator Drax Group (DRX.L) posted a smaller-than-expected drop in annual profit on Thursday and increased its dividend for the year, supported by steps taken to control costs in the face of supply chain issues.
The company is aiming to double its sustainable biomass production capacity and sales of wood-based biomass pellets by 2030 by increasing investments, to capitalise on higher demand from Europe and Asia as countries look to move away from coal. read more
"Over the past 10 years, Drax has invested over 2 billion pounds ($2.7 billion) in renewable energy and plans to invest a further 3 billion pounds this decade, supporting the global transition to a low-carbon economy," Chief Executive Officer Will Gardiner said.
The company, whose power stations provide around 6% of Britain's electricity, has been navigating supply-chain issues due to wildfires and rains, which disrupted rail networks and local networks for supply of its pellets.
However, Drax increased its total dividend by 10% to 18.8 pence per share after adjusted core profit of 398 million pounds came in ahead of analysts' estimate of a profit of 374 million-391 million pounds.
Record gas prices in Europe have led to soaring demand for alternative power, including Drax's supplies, but it has not benefited from the prices as it had already hedged contracts for 2021. However, prices this year and next are higher.
($1 = 0.7415 pounds)
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