Drax pre-tax profits fall 64% to £59m in 2015

Energy company Drax has announced a 64% fall in pre-tax profits from £166m to £59m in the year to December 2015.

It said it had been affected by the government's U-turn on green energy support and low energy prices.

Drax chief executive Dorothy Thompson described it as a "challenging year".

However, she said the company had achieved its ambition of becoming a predominantly biomass-fuelled generator.

Drax's shares were down more than 2% in morning trading.

Drax's shares have fallen dramatically following changes in government policy last year.

They dropped by a third on the day the Chancellor, George Osborne, scrapped the climate change tax levy exemption in the budget last summer.

The government has reduced support for the use of wood pellets, a renewable biomass fuel, that the company burns at its plant in North Yorkshire.

Its chairman said that the chancellor's announcement cut its earnings before interest, tax, depreciation and amortisation by £30m in 2015, an impact that will double in 2016.

Earnings for 2015 of £169m were below those of 2014 at £229m.

Last year Drax abandoned a £1bn project to introduce carbon capture technology to cut emissions, because of cuts to government subsidies.

It said despite lower energy prices these were not matched by a corresponding drop in coal prices.

The company warned that two factors, the "continued deterioration in commodity prices" and the issue of support from the government would be the two chief influences on its future performance.