ROC output re-profiled, higher hedged prices Drax reported 1H21 results this morning, and will hold a presentation at 9am. EBITDA of £186m (o/w £165m was from continuing operations), was below our £208m estimate. EPS of 14.6p was below our 17.5p estimate, although DPS of 7.5p was broadly in line with our DPS forecast of 7.4p. Net debt of £1,029m, was slightly higher than our £960m estimate. Power generation EBITDA of £185m was below our £193m estimate, with some re-profiling of ROC volumes from 1H to 2H which saw volumes bought back at market prices in 1H & resold at 2H market prices. The contracted power position over 2021-23 is now 29.3TWh @ £52.1/MWh vs. 24.4TWh @ £48.5/MWh, suggesting a big step up in price on the additional volumes sold. The price uplift spans in all three years, underscoring the logic in the re-profiling of ROC volumes in FY21. However, biomass costs have risen due to historic FX hedging. Pellet production EBITDA of £40m was below our £47m, with new capacity not commissioning until 2H. The cost of production fell to $141/t (vs. $154/t in 1H20). B2B EBITDA loss of £(5)m was broadly in line with our £(2)m estimates. FY21E EBITDA guidance is unchanged, with Drax referring to recently published consensus. Our FY21E EBITDA of £377m is line with consensus (£377m), as are our EPS of 26p (consensus 26.8p), and DPS of 18.5p (consensus 18.4p). Strategically Drax has commented on the biomass opportunity & its ambitions, BECCS, and the development of an opportunity to expand the Cruachan pumped storage to >1GW (from 400MW). Options for the SME supply business are still being considered. A Capital Markets Day will be held in November.