Shares of North Yorkshire-based power company Drax Group plc rose about 16% on Wednesday after it published a trading update saying that its 2019 final dividend of 9.5p per share — a £37 million payout — will be paid, subject to shareholder approval.

That’s despite Drax saying that it now expects an estimated potential impact from Covid-19 of £60 million and that it has “significantly increased its expectation of potential customer business failures and higher bad debt …”

In its outlook, Drax said: “The trading and operational performance of the group has been robust in the first three months of 2020.

“While the impact of Covid-19 is still unfolding, the group’s expectations for 2020 Adjusted EBITDA are currently in line with consensus inclusive of an estimated potential impact from Covid-19 of £60 million, principally in relation to its customers business.

“Full year expectations for the group remain underpinned by good operational availability for the remainder of 2020.

“In the Customers business, the consequences of Covid-19 are only now starting to become visible.

“It is expected to result in reduced demand and a potential increase in bad debt, which represents a major sensitivity, particularly in the SME market.

“As a result, Drax has significantly increased its expectation of potential customer business failures and higher bad debt …”

Drax Group CEO Will Gardiner said: “With our strong balance sheet, robust trading and operational performance, and resilient sustainable biomass supply chain, Drax is in a strong position to support its employees, business customers and communities during the Covid-19 crisis, while continuing to generate returns for shareholders.

“As an important part of the UK’s critical national infrastructure, we recognise our responsibility to support the country’s response to Covid-19.

“We have strong business continuity plans in place and are in close contact with the UK Government.

“Our dedicated teams across England, Scotland and Wales, supported by our US biomass colleagues and business partners, are working around the clock to generate and supply the flexible, low-carbon and renewable electricity the UK needs, not least to the 250,000 businesses, including care homes, hospitals and schools we supply.

“The group is also providing support for communities and others affected by Covid-19.

“Nevertheless, it is still early in this pandemic.

“As Covid-19 continues to develop, we remain vigilant in looking to protect all our stakeholders and will report further if there are significant changes to our outlook for 2020.”