Drax Group PLC on Thursday said its performance in the first quarter of the year was ‘strong,’ as it is working to align itself to the UK’s energy needs.

The Selby, England-based electricity generator said it expects 2025 adjusted earnings before interest, tax, depreciation and amortisation to be around the top end of consensus estimates, between £848 million and £896 million, in light of its ‘strong’ first-quarter performance.

The top end of the consensus would be 16% below the adjusted Ebitda of £1.06 billion Drax had reported for 2024.

Drax said it has index-linked agreements worth over £650 million, ‘providing high-quality earnings which extend visibility of the group’s contracted earnings to 2043’, and its Pellet Production business and Drax Power Station are both ‘performing well’.

The company also has around £2 billion of contracted forward power sales between 2025 and 2027 on its renewable obligation biomass, pumped storage and hydro generation assets.

Drax said it has so far bought back £207 million of its £300 million share buyback programme.

Chief Executive Officer Will Gardiner said: ‘The UK’s target for a clean power system and increase in intermittent renewables means more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing or the sun isn’t shining. We are working to create value and growth in the short, medium and long-term, aligned to the UK’s energy needs and underpinned by a strong balance sheet and cash generation, a disciplined approach to capital allocation and attractive returns for shareholders.’

Drax will release interim results on July 31.

Drax shares rose 1.1% to 624.00 pence each on Thursday morning in London.

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