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Argo Blockchain revenue up but well behind 2022 performance


Argo Blockchain [LON:ARB], the London-based Bitcoin miner published its financial results for 1Q23 this morning (6th June) reporting revenues of USD11.4m, up 15% quarter-on-quarter, but down substantially, some 41% from the same period in 2022.

As previously reported, Argo’s performance is closely linked to the performance of digital currencies, the best known being Bitcoin. Between March 2022 and March 2023 Bitcoin performed fairly poorly, losing about 12% in absolute terms.

However, since the start of the New Year, Bitcoin has done quite a bit better, going from around USD23,200 to USD39,950 by the end of May, so one would expect a bit of an uptick in Argo Blockchain’s next set of results.

The company reported a net loss of USD8.7m in the quarter, well behind the USD2m profit it made this time last year with adjusted earnings of just US1.6m, 88% behind EBITDA of USD14m in 1Q22.

Argo Blockchain to reduce operational expenses

The company has been forced to cut its cloth accordingly, admitting that it had been a bit undisciplined with its finances and operational expenses. Interim CEO, Seif el-Bakly said in a statement this morning: “In terms of financial discipline, we are taking a much more critical view of all operating expenses, and we’ve implemented a robust internal process aimed at reducing non-mining operating expenses. Compared to 2022, we’ve reduced our expenses by 70%. We are also evaluating options to strengthen our balance sheet.”

Increasing hashrate

Increasing hashrate was a key focus this year, having produced 491 Bitcoin in the quarter at a rate of 5.3 Bitcoin a day and el-Bahly said that the firm was due to install BlockMiner machines this year which would increase the company’s total hashrate to 2.8 EH/s. Argo held 85 Bitcoin and USD14.2 of cash in hand.

On the bright side, mining margin increased from 35% in 4Q22 to 49% in 1Q23 and Argo reduced its financing costs by 63% compared to 2H22.

As previously reported, Argo Blockchain operates a cryptocurrency mining platform in Canada and the US, with about 16,000 specialist mining rigs generating almost all of its revenue.

The company’s shares opened trading in London today at 8.6p and has ranged between 2p and 55p over 52-weeks. The company has offered a year-to-date return of 36.2% and a one-year return of -82.7% giving the company a market capitalisation of GBP43.6m.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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