(DRX.L) Drax Group PLC Buy/Sell

LONDON, Nov 5 (Reuters) - Drax Group Plc:

LONDON, Nov 5 (Reuters) - Centrica Plc:

RNS Number : 9923B Drax Group PLC 05 November 2009

5 November 2009

Drax Group plc

("Drax" or the "Company")

Symbol:DRX

DRAX SECURES 5 YEAR POWER SALE TO 2015 WITH CENTRICA

Drax has entered into a further agreement with Centrica to provide 300MW of baseload power for a 5 year period commencing October 2010. This equates to around 13.1TWh of power.

The agreement provides Drax with fixed dark green spreads consistent with Drax's trading strategy. Drax will supply power at agreed prices which include Centrica paying Drax for coal, based on international coal prices, and delivering matching CO2 allowances. The volume of this baseload contract is equivalent to a load factor of approximately 8% for the period October 2010 to September 2015.

Dorothy Thompson, Chief Executive of Drax said: "I am very pleased to announce this new agreement with Centrica, which underlines our strong working relationship. As with the first Centrica agreement in 2006, this not only gives Drax options over how and when to dispatch power but is also consistent with our progressive hedging policy. Moreover, locking in dark green spreads out to 2015 clearly demonstrates that there is appetite for deals beyond 2012".

Enquiries:

For further information please contact:

Andrew Koss, Investor Relations +44 (0) 1757 612333
Mike Harrison / Nick Claydon, Brunswick +44 (0) 20 7404 5959

Website: www.draxgroup.plc.uk

Notes to Editors

This agreement is in addition to the Centrica agreement announced on 11 April 2006. Under the terms of the original agreement, Drax agreed to provide 600MW of baseload power for a 5 ¼ year period commencing October 2007.

That agreement also provides Drax with fixed dark green spreads consistent with Drax's trading strategy. Drax will supply power at agreed prices which include Centrica paying Drax for coal, based on international coal prices, and delivering matching CO2 allowances. The volume of this baseload contract is equivalent to a load factor of approximately 16% for the period October 2007 to December 2012.

END

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This information is provided by RNS The company news service from the London Stock Exchange

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By Jonathan Gleave and Victoria Bryan

MADRID/LONDON, Oct 21 (Reuters) - Spanish utility Iberdrola and British peer Drax both struggled to maintain profitability due to weak power prices in Spain and challenging commodity markets.
Core profit at Spain's largest power group in the first nine months of the year just missed estimates as higher operating costs and lower revenue from its deregulated power operations practically wiped out the impact of double-digit revenue growth.
Drax, which runs Britain's largest coal-fired power plant, said in a statement its forward contract position meant it was continuing to trade in line with expectations for this year.
"It will be difficult for Drax to meet expectations as investors are expecting higher margins than the market is allowing right now," said a London-based analyst who declined to be identified.
The analyst added Iberdrola has to sooth investor concerns over whether it can meet its own expectations for 2010.
Iberdrola underperformed its European peers, while Drax outperformed. Iberdrola was down 0.4 percent at 0928 GMT while Drax was up 1.5 percent.
The utilities are the first large utilities to report earnings for the nine months through September. Finland's Fortum reports on Thursday.

(With additional reporting by Peter Dinkloh in Frankfurt; Editing by Mike Nesbit) Keywords: IBERDROLA/DRAX (peter.dinkloh@reuters.com; +4969 7565 1345; Reuters Messaging peter.dinkloh.reuters.com@reuters.net)

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