- Generated record revenue of $26.0 million (£19.3 million)
- Record $17.3 million of net income and $28.2 million of EBITDA
(£12.9 million of net income and £21.0 million of EBITDA)1
- Mined 597 Bitcoin and Bitcoin Equivalents in Q3 2021
- Completed ADR listing on Nasdaq
- Construction of Helios mining facility in Dickens County, Texas
underway
Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK), (“Argo” or the
“Company”), a global leader in sustainable cryptocurrency mining
and blockchain, today announced its financial results for the
quarter ended September 30, 2021. All $ amounts are in United
States Dollars (“USD”) and all £ amounts are in British Pounds
(“GBP“), unless otherwise stated.
Argo generated record-setting revenue, net income and EBITDA of
$26.0 million, $17.3 million and $28.2 million, respectively, for
the third quarter of 2021 (£19.3 million, £12.9 million, and £21.0
million, respectively). For the nine months ended September 30,
2021, the Company’s revenue, net income and EBITDA were $67.9
million, $27.1 million and $49.8 million, respectively (£50.4
million, £20.1 million, and £36.9 million, respectively).
“From breaking ground on our sustainable cryptocurrency mining
facility in Dickens County, Texas to our public listing on Nasdaq
in the United States, this quarter has been pivotal as Argo
continues to scale,” stated Peter Wall, Chief Executive Officer of
Argo Blockchain. “I am proud of the growth we experienced during
the quarter and believe Argo is strategically positioned to
continue this momentum as we build out our Helios facility in
Texas.”
Texas Mining Facility Update
In July 2021, Argo broke ground on its renewable energy-focused
200-megawatt (MW) cryptocurrency mining facility in Dickens County,
Texas. The new Helios facility will bolster Argo’s mining capacity
and is expected to add at least 20 new, full-time jobs in Dickens
County. The site gives Argo access to up to 800 MW of electrical
power and has garnered excitement and support from local community
members and government officials.
Bitcoin Mining
During the third quarter, Argo mined 597 Bitcoin and Bitcoin
Equivalent (together, BTC), bringing Argo’s BTC holding to 1,836 as
of September 30, 2021. Argo has been able to achieve these results
while maintaining a gross margin of 120% and an industry-leading
mining margin of 85% with an average direct cost per BTC mined of
$6,293 (£4,673). On September 30, 2021, Argo executed a purchase
agreement for 20,000 Bitmain Antminer S19J Pro machines for the
mining facility it is building in Texas. The machines are expected
to be delivered starting Q2 2022 and will increase our total
hashrate capacity to approximately 3.7 Exahash, up from 1.075 at
the end of Q3 2021.
(1) Due to favorable changes in fair value of Bitcoin and
Bitcoin Equivalents in Q3 2021, gross profit and EBITDA exceeded
revenue in the period.
United States Public Listing on Nasdaq
Among the many milestones experienced throughout the quarter,
Argo completed its ADR listing on Nasdaq on September 23, 2021. The
Company has been publicly listed on the London Stock Exchange since
August 2018 and is now listed in both jurisdictions.
Earnings Conference Call
Argo will host a conference call to discuss its results at 08:00
ET/12:00 GMT tomorrow, Tuesday, November 2, 2021. The live webcast
of the call can be accessed via the Investor Meet Company
platform.
Investors can sign up to Investor Meet Company for free and add
Argo Blockchain via the following link:
https://www.investormeetcompany.com/argo-blockchain-plc/register-investor
Investors already following Argo Blockchain on the Investor Meet
Company platform will be invited automatically.
Forward-Looking Information
This press release contains forward-looking statements within
the meaning of applicable securities laws with respect to our
cryptocurrency mining facility in Texas. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Without limiting the generality of
the foregoing, forward-looking statements contained in this press
release specifically include the expectations of plans, strategies,
objectives, and anticipated financial and operating results of the
Company, including hash rates, the Company's mining program,
delivery schedules, future hashrates and other guidance included in
this press release. These statements are based on certain
assumptions made by the Company based on management's experience
and perception of historical trends, current conditions,
anticipated future developments and other factors believed to be
appropriate. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Company, which may cause actual results to differ
materially from those implied or expressed by the forward-looking
statements. Actual results could differ from those described herein
for a variety of reasons, including unanticipated delays in machine
delivery due to component supply shortages or other reasons, or
disruptions to the Company’s current mining fleet that could reduce
future hashrate. For a more complete discussion of factors that
could cause our actual results to differ from those described in
this announcement, please refer to the filings that Company makes
from time to time with the United States Securities and Exchange
Commission and the United Kingdom Financial Conduct Authority,
including the section entitled “Risk Factors” in the Company’s
Registration Statement on Form F-1.
Non-IFRS Measures
Bitcoin and Bitcoin Equivalent Mining Margin and EBITDA are
financial measures not defined by IFRS. We believe Bitcoin and
Bitcoin Equivalent Mining Margin and EBITDA have limitations as
analytical tools. In particular, Bitcoin and Bitcoin Equivalent
Mining Margin excludes the depreciation of mining equipment and so
does not reflect the full cost of our mining operations, and it
also excludes the effects of fluctuations in the value of digital
currencies and realized losses on the sale of digital assets, which
affect our IFRS gross profit. Further, EBITDA excludes interest
income (expense), taxes, depreciation and amortization, which are
important components of our IFRS net income/(loss). These measures
should not be considered as an alternative to gross margin or net
income/(loss), as applicable, determined in accordance with IFRS,
or other IFRS measures. These measures are not necessarily
comparable to similarly titled measures used by other companies. As
a result, you should not consider these measures in isolation from,
or as a substitute analysis for, our gross margin or net
income/(loss), as applicable, as determined in accordance with
IFRS.
Operating and Financial Overview
Three Months Ended September
30, 2021
Nine Months Ended September
30, 2021
Figures in 000s except per share and BTC
mined
$
£
$
£
Operating results
Bitcoin mined
597
597
1,480
1,480
Income statement
Revenues
$25,979
£19,287
$67,852
£50,372
Direct costs
(3,757)
(2,790)
(11,322)
(8,404)
Depreciation of mining equipment
(3,249)
(2,412)
(9,646)
(7,161)
Change in fair value of digital
currencies
11,725
8,705
3,094
2,297
Realized gain on sale of digital
currencies
512
380
807
599
Gross Profit
$31,210
£23,170
$50,785
£37,703
Operating costs and expenses
Consulting fees
(812)
(602)
(1,222)
(907)
Professional fees
(307)
(228)
(866)
(643)
General and administrative
(555)
(412)
(2,675)
(1,986)
Share based payment
(1,734)
(1,287)
(3,845)
(2,855)
Foreign exchange
(1,963)
(1,458)
(1,374)
(1,020)
Operating profit
$25,839
£19,183
$40,803
£30,292
Loss on sale of investment
(1,010)
(750)
(1,010)
(750)
Interest expense
(273)
(203)
(826)
(613)
Interest income
-
-
-
-
Profit before taxation
$24,556
£18,230
$38,967
£28,929
Income tax expense
(7,212)
(5,354)
(11,905)
(8,838)
Profit after taxation
$17,344
£12,876
$27,062
£20,091
Other comprehensive income
(138)
(102)
(624)
(463)
Total comprehensive income attributable
to the equity holders of the company
$17,206
£12,774
$26,438
£19,628
Earnings per share attributable to
equity holders
Basic earnings per share
$0.04
£0.03
$0.06
£0.04
Diluted earnings per share
$0.04
£0.03
$0.05
£0.04
The following table shows a reconciliation of Bitcoin and
Bitcoin Equivalent Mining Margin to gross margin, the most directly
comparable IFRS measure, for the three months ended September 30,
2021 and the nine months ended September 30, 2021.
Three Months Ended
September 30, 2021
Nine Months Ended September
30, 2021
Figures in 000s except per share
$
£
$
£
Gross Profit
$31,210
£23,170
$50,785
£37,703
Gross Margin
120%
120%
75%
75%
Depreciation of mining equipment
3,249
2,412
9,646
7,161
Change in fair value of digital
currencies
(11,725)
(8,705)
(3,094)
(2,297)
Realized gain on sale of digital
currencies
(512)
(380)
(807)
(599)
Crypto-currency management fees
(710)
(527)
(2,257)
(1,675)
Mining Profit
$21,512
£15,970
$54,273
£40,293
Bitcoin and Bitcoin Equivalent Mining
Margin
85%
85%
83%
83%
The following table shows a reconciliation of EBITDA to net
income, the most directly comparable IFRS measure, for the three
months ended September 30, 2021 and the nine months ended September
30, 2021.
Three Months Ended September
30, 2021
Nine Months Ended September
30, 2021
Figures in 000s except per share
$
£
$
£
Profit before taxation
$17,344
£12,876
$27,062
£20,091
Interest expense
273
203
826
613
Income tax expense
7,212
5,354
11,905
8,838
Depreciation/Amortization
3,418
2,537
9,964
7,398
EBITDA
$28,247
£20,970
$49,757
£36,940
(1) Due to favorable changes in fair value of Bitcoin and
Bitcoin Equivalents in Q3 2021, gross profit and EBITDA exceeded
revenue in the period.
*Dollar values translated from pound sterling into U.S. dollars
at the rate of £1.00 to $1.347, which was the noon buying rate of
the Federal Reserve Bank of New York on September 30, 2021.
This release contains inside information.
About Argo:
Argo Blockchain plc is a global leader in cryptocurrency mining
with one of the largest and most efficient operations powered by
clean energy. The Company is headquartered in London, UK and its
shares are listed on the Main Market of the London Stock Exchange
under the ticker: ARB and on the Nasdaq Global Select Market in the
United States under the ticker: ARBK.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211101005985/en/
Argo Blockchain Peter Wall Chief Executive via
Tancredi +44 203 434 2334 finnCap Ltd Corporate Finance
Jonny Franklin-Adams Tim Harper Joint Corporate
Broker Sunila de Silva +44 207 220 0500 Tennyson
Securities Joint Corporate Broker Peter Krens +44 207
186 9030 Tancredi Intelligent Communication UK &
Europe Media Relations Emma Valgimigli +44 7727 180
873 Emma Hodges +44 7861 995 628 Salamander
Davoudi +44 7957 549 906 argoblock@tancredigroup.com
Carissa Felger/Genevieve Pirrong Gasthalter & Co. (212)
257-4170
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