Shares in Drax were down on the FTSE 250 in morning trading despite the power station owner reporting a rise in earnings and pre-tax profit in the full year ended 31 December 2010.

EBITDA in the period increased 10 per cent to £391 million, while pre-tax profit rose from £158 million in the previous year to £255 million.

The group said that it was more than doubling its total dividends from 13.7 pence per share to 32.0 pence per share.

Drax said that its improved profits were down to greater operational excellence and tighter cost management.

Dorothy Thompson, Chief Executive of Drax, said, "We have delivered an excellent performance across the business in 2010. We began the year with a strong hedged position, contracted at higher average margins than for 2009. Our record operational performance and continued tight cost control have further enhanced profitability.

"We continue to make progress in our biomass operations. Drax Power Station generated around 7% of the UK's renewable power in 2010, which is more than twice as much as any other facility in the UK. This was despite not using our renewable facilities at full capacity because of low regulatory support for biomass.

"We believe reliable and flexible electricity generation from biomass could and should make a significant contribution to meeting the UK's demanding climate change targets at relatively low cost. With appropriate regulatory support, we stand ready to expand our biomass capability significantly, increasing our renewable output from today's level."

By 09:35 shares in Drax were down 0.02 per cent on the FTSE 250 to 394.80 pence per share.