Power down

Power station operator, Drax, saw its first-half earnings drop 27 per cent to £150m, but has forecast a rise in profits for 2010, driven largely by favourable hedging contracts.

The Selby-based group reported a drop in revenues of 12 per cent to £707m. Gross profit was down 17 per cent to £255m from £307m a year earlier and operating profit fell from £161m to £43m.

The group has attributed the sharp fall in revenue to lower power demand and depressed UK gas prices. However, chairman Charles Berry said the company had made ‘steady progress’ in the first six months of the year and was on track to meet expectations.

He said: 'With a commitment to delivering value to our shareholders, we have taken sensible steps to ensure we are well placed to continue to do just that.

‘This year the business has had a strong focus on cost, capital and cash management. Through strong action across the business we fully expect to deliver on our targeted savings.'