Drax says Covid-19 could cost it £60m

Power producer Drax on Wednesday warned of a £60 million hit from Covid-19 as its business customers struggle.

The firm, named after the UK’s largest power station in Yorkshire, said it has significantly increased its expectation of potential customer failures and higher bad debt.

The lockdown has lowered demand for power from companies.

Drax added: “In the customers business, the consequences of Covid-19 are only now starting to become visible.”

But the energy company cheered robust trading for the first quarter and said it is on track to meet underlying profit forecasts of £398 million for 2020.

It will pay a 2019 final dividend of 9.5p per share.

Will Gardiner, chief executive of Drax Group, said: "With our strong balance sheet, robust trading and operational performance, and resilient sustainable biomass supply chain , Drax is in a strong position to support its employees, business customers and communities during the Covid-19 crisis, while continuing to generate returns for shareholders.”

The shares jumped 14.5p to 211.8p.