Argo Blockchain PLC Announces 2024 Interim Results

Rhea-AI Summary

Argo Blockchain plc (LSE:ARB)(NASDAQ:ARBK) announced its H1 2024 results, showing an 18% increase in revenue to $29.3 million compared to H1 2023. Despite the Bitcoin halving and a 46% decrease in Bitcoin mined, the company's mining margin improved to $11.5 million. Key highlights include:

- Reduced Galaxy loan from $23.5 million to $5.3 million, fully repaid in August 2024
- Raised $9.9 million through share issuance in January 2024
- Sold Mirabel data centre for $6.1 million, consolidating operations
- Recorded $22 million impairment on mining machines
- Net loss of $32.7 million for H1 2024
- Adjusted EBITDA of $5.7 million

CEO Thomas Chippas emphasized the company's focus on financial discipline and operational efficiency, positioning Argo to explore growth opportunities and strategic initiatives.

Positive

• 18% increase in revenue to $29.3 million in H1 2024 compared to H1 2023
• Mining margin improved to $11.5 million (39%) in H1 2024 from $10.2 million (42%) in H1 2023
• Reduced Galaxy loan by $18.2 million, fully repaid in August 2024
• Raised $9.9 million through share issuance in January 2024
• Sold Mirabel data centre for $6.1 million, expected to reduce non-mining operating expenses by $0.7 million per year
• Adjusted EBITDA increased to $5.7 million in H1 2024 from $2.8 million in H1 2023

Negative

• 46% decrease in Bitcoin mined (507 BTC) in H1 2024 compared to H1 2023 (947 BTC)
• Recorded $22 million impairment on mining machines
• Net loss increased to $32.7 million in H1 2024 from $18.6 million in H1 2023
• Cash and Bitcoin equivalent holdings decreased to $4.0 million and 11 BTC by end of June 2024

Insights

Financial Analyst

Argo Blockchain's H1 2024 results reveal a mixed financial picture. While revenues increased by 18% to $29.3 million, the company still posted a substantial net loss of $32.7 million. The increased revenue, despite mining 46% fewer Bitcoin, highlights the impact of rising Bitcoin prices on mining operations.

The company's efforts to improve its financial position are evident. Argo has fully repaid its Galaxy loan, reducing debt from $23.5 million to zero. This deleveraging, combined with cost-cutting measures like consolidating operations, could improve future profitability. However, the $22 million impairment on mining machines reflects the challenging economics of crypto mining post-halving.

Investors should note the improved Adjusted EBITDA of $5.7 million, up from $2.8 million in H1 2023, suggesting better operational efficiency. The recent $8.3 million capital raise provides some short-term liquidity, but sustainable profitability remains a key challenge in the volatile crypto mining sector.

Cryptocurrency Expert

The Bitcoin halving event in 2024 has significantly impacted Argo's operations, as evidenced by the 46% decrease in Bitcoin mined. This highlights the increasing difficulty and competitiveness in Bitcoin mining post-halving. The global hashrate increase and reduction in Bitcoin-denominated hash price further underscore the challenges miners face in maintaining profitability.

Argo's ability to increase revenue despite mining fewer coins demonstrates the critical role of Bitcoin price appreciation in sustaining mining operations. The company's mining margin of 39%, though slightly lower than last year's 42%, remains relatively healthy in the current environment.

The strategic decision to consolidate operations by relocating mining machines from Mirabel to Baie Comeau reflects the industry-wide focus on operational efficiency. As the crypto mining landscape evolves, companies like Argo must continually optimize their operations to remain competitive, especially as we approach the next halving cycle.

LONDON, UNITED KINGDOM / ACCESSWIRE / August 28, 2024 / Argo Blockchain plc, a global leader in cryptocurrency mining (LSE:ARB)(NASDAQ:ARBK), is pleased to announce its results for the six months ended 30 June 2024.

Highlights

• Revenues of $29.3 million for H1 2024 compared to $24.0 million for H1 2023, an 18% increase, driven primarily by an increase in Bitcoin price. Revenue in the first half of 2024 compared to 2023 increased despite the Bitcoin halving and a decrease in the number of Bitcoin mined. The total number of Bitcoin ("BTC") mined during H1 2024 was 507, a 46% decrease from H1 2023 of 947. This is primarily due to the increase in the global hashrate and the reduction in the bitcoin denominated hash price.

• Mining margin of $11.5 million or 39% for H1 2024, compared to $10.2 million or 42% for H1 2023.

• On 8 January 2024, Argo raised gross proceeds of $9.9 million through the issue of 38,064,000 ordinary shares at a price per share of £0.205 to certain institutional investors.

• On 28 March 2024, the Company closed the sale of its five megawatt data centre located in Mirabel, Quebec for total consideration of $6.1 million. The Company relocated the mining machines from the Mirabel Facility to its facility in Baie Comeau, Quebec, and the Company expects this consolidation to reduce its non-mining operating expenses by $0.7 million per year.

• Reduced the Galaxy loan by $18.2 million from $23.5 million at 1 January 2024 to $5.3 million at 30 June 2024. In August 2024, the Galaxy loan was repaid in full.

• Recorded a $22 million impairment on its mining machines reflecting current mining economics.

• Net loss was $32.7 million for H1 2024, compared to a net loss of $18.6 million in H1 2023. Adjusted EBITDA was $5.7 million for H1 2024 compared to $2.8 million in H1 2023.

• The Company ended June 2024 with $4.0 million of cash and 11 Bitcoin equivalent. On 31 July 2024, the Company raised $8.3 million of gross proceeds from the issuance of 57.8 million shares and 57.8 million warrants through a private share placement with an institutional investor. The shares were issued at £0.1125 and the warrants have an exercise price of £0.1125.

Management Commentary

Thomas Chippas, CEO at Argo Blockchain said: "Argo's focus on financial discipline and operational efficiency enabled us to pay off our $35 million debt obligation to Galaxy, significantly deleveraging our balance sheet. This positions us well to explore investing in growth and strategic initiatives that can drive long-term value for our shareholders."

Non-IFRS Measures

The following table shows a reconciliation of mining margin percentage to gross margin, the most directly comparable IFRS measure, for the six month periods ended 30 June 2024 and 30 June 2023.

	Period ended	Period ended
	30 June 2024	30 June 2023
	(unaudited)	(unaudited)
	$'000	$'000
Gross margin	1,792	(1,371)
Gross margin percentage	6%	(6%)
Depreciation of mining equipment	9,667	12,047
Change in fair value of digital currencies	27	(489)
Mining margin	11,486	10,187
Mining margin percentage	39%	42%

The following table shows a reconciliation of Adjusted EBITDA to net (loss) / income, the most directly comparable IFRS measure, for the six month periods ended 30 June 202.

		Period ended				Period ended
		30 June 2024				30 June 2023
		(unaudited)				(unaudited)
		$'000				$'000
Net Loss			(32,734	)			(18,563	)
Interest expense			4,296				6,335
Income tax expense			340				-
Depreciation and amortisation			10,114				12,698
Restructuring and transaction related fees			1,118				1,399
Foreign Exchange			(292	)			(1,403	)
Share based payment			3,594				1,889
Impairment of property, plant and equipment			22,012
Loss on sale of tangible assets			429
Gain on sale of assets held for sale			(3,397	)			-
Impairment of intangible assets			226				-
Equity accounting loss from associate			-				458
Adjusted EBITDA			5,706				2,813

Inside Information and Forward-Looking Statements

This announcement contains inside information and includes forward-looking statements which reflect the Company's current views, interpretations, beliefs or expectations with respect to the Company's financial performance, business strategy and plans and objectives of management for future operations. These statements include forward-looking statements both with respect to the Company and the sector and industry in which the Company operates. Statements which include the words "remains confident", "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue", "estimate", "future", "opportunity", "potential" or, in each case, their negatives, and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties because they relate to events that may or may not occur in the future, the Company may be unable to secure sufficient additional financing to meet its operating needs, and the Company may not generate sufficient working capital to fund its operations for the next twelve months as contemplated in note 3 below. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause the Company's actual results, prospects and performance to differ materially from those indicated in these statements. In addition, even if the Company's actual results, prospects and performance are consistent with the forward-looking statements contained in this document, those results may not be indicative of results in subsequent periods. These forward-looking statements speak only as of the date of this announcement. Subject to any obligations under the Prospectus Regulation Rules, the Market Abuse Regulation, the Listing Rules and the Disclosure Guidance and Transparency Rules and except as required by the United Kingdom Financial Conduct Authority ("FCA"), the London Stock Exchange, the City Code on Takeovers and Mergers or applicable law and regulations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. 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 FCA, including the section entitled "Risk Factors" in the Company's Annual Report on Form 20-F.

For further information please contact:

Argo Blockchain
Investor Relations	ir@argoblockchain.com
Tennyson Securities
Corporate Broker Peter Krens	+44 207 186 9030
Fortified Securities
Joint Broker Guy Wheatley, CFA	+44 74930989014 guy.wheatley@fortifiedsecurities.com
Tancredi Intelligent Communication UK & Europe Media Relations	argoblock@tancredigroup.com

About Argo:

Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain technology company focused on large-scale cryptocurrency mining. With mining operations in Quebec and Texas, and offices in the US, Canada, and the UK, Argo's global, sustainable operations are predominantly powered by renewable energy. In 2021, Argo became the first climate positive cryptocurrency mining company, and a signatory to the Crypto Climate Accord. For more information, visit www.argoblockchain.com.

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SOURCE: Argo Blockchain PLC

View the original press release on accesswire.com

FAQ

What was Argo Blockchain's (ARBK) revenue for H1 2024?

Argo Blockchain's revenue for H1 2024 was $29.3 million, an 18% increase from $24.0 million in H1 2023.

How many Bitcoin did Argo Blockchain (ARBK) mine in H1 2024?

Argo Blockchain mined 507 Bitcoin in H1 2024, a 46% decrease from 947 Bitcoin mined in H1 2023.

What was Argo Blockchain's (ARBK) net loss for H1 2024?

Argo Blockchain reported a net loss of $32.7 million for H1 2024, compared to a net loss of $18.6 million in H1 2023.

How much did Argo Blockchain (ARBK) reduce its Galaxy loan in H1 2024?

Argo Blockchain reduced its Galaxy loan by $18.2 million, from $23.5 million on January 1, 2024, to $5.3 million on June 30, 2024. The loan was fully repaid in August 2024.