REG - Argo Blockchain PLC - Argo 3rd Quarter Results
20/11/2024 07:00
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RNS Number : 8635M Argo Blockchain PLC 20 November 2024
Press Release
20 November 2024
Argo Blockchain plc
("Argo" or "the Company")
Q3 2024 Results (Unaudited)
Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK), a global leader in
cryptocurrency mining, announces its unaudited financial results for the
quarter ended 30 September 2024. All $ amounts are in United States Dollars
("USD") unless otherwise stated.
Q3 2024 Financial Highlights:
● Revenue of $7.5 million and $36.7 million for the three and nine
months ended 30 September 2024, respectively, compared to $10.4 million and
$34.4 million for the prior year periods
● Total Bitcoin ("BTC") mined in the quarter was 123, or 1.3 BTC per
day
● Mining margin percentage of 8% and 33% for the three and nine
months ended 30 September 2024, respectively, compared to 58% and 47% for the
prior year periods. The prior year periods benefited from significant power
credits due to economic curtailments
● Net loss of $6.3 million and $39.2 million for the three and nine
months ended 30 September 2024, respectively, compared to net loss of $9.9
million and $26.1 million for the prior year periods.
● Adjusted EBITDA of negative $2.1 million and positive $3.9 for the
three and nine months ended 30 September 2024, respectively, compared to
positive EBITDA of $2.4 million and $5.2 million for the prior year periods.
● The Company ended the quarter with cash of $2.5 million and held
four BTC or BTC Equivalent.
● Reduced debt by $12.4 million during the quarter, including the
full repayment of the Galaxy loan.
Post-period Updates:
· On 11 October 2024, the Company announced that the class action
lawsuit, Murphy vs. Argo Blockchain plc et al, filed in the Eastern
District of New York on 26 January 2023, and transferred to the Southern
District of New York on 4 August 2023, was dismissed on 9 October 2024,
with prejudice and without leave to amend.
● On 7 November 2024, the Company announced that it has entered a
non-binding letter of intent ("LOI") with BE Global Development Limited
("BE"), a specialist in High Performance Computing (HPC) solutions, to explore
a significant expansion at the Company's owned and operated Baie-Comeau
facility.
● On 7 November 2024, despite ongoing discussions with Galaxy to
renew the Company's current hosting agreement at Helios, the Company was
informed by Galaxy that it did not intend to renew the contract beyond the
current end date of 28 December 2024, as such we are currently in discussions
regarding our miners located at Helios.
Management Commentary:
Thomas Chippas, Chief Executive Officer of Argo, said: "The third quarter was
a difficult quarter for BTC miners, including Argo. It is positive that we
have seen improvement in BTC mining economics in October, as noted in our
October Operations Update, and that this has continued into November which has
also been strong. The High Performance Computing hosting opportunity at our
Baie Comeau facility is exciting and demonstrates our ability to diversify our
capabilities beyond BTC into the growing AI computational market. At this
juncture for the industry, we are keenly focused on growth opportunities that
play to our deep expertise."
Earnings Conference Call
Argo will host a conference call to discuss its results at 10:00 ET / 15:00
GMT today, Wednesday 20 November 2024. The live webcast of the call can be
accessed via the Investor Meet Company platform.
Investors can sign up to Investor Meet Company and add Argo Blockchain via the
following link:
https://www.investormeetcompany.com/argo-blockchain-plc/register-investor
(https://www.investormeetcompany.com/argo-blockchain-plc/register-investor)
Investors already following Argo Blockchain on the Investor Meet Company
platform will be invited automatically.
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, including the risk that the Company may receive the benefits
contemplated by its transactions with Galaxy, 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. 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 and Transparency Rules
and except as required by the FCA, the London Stock Exchange, the City Code
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 United Kingdom Financial Conduct Authority,
including the section entitled "Risk Factors" in the Company's Annual Report
on Form 20-F.
Non-IFRS Measures
Bitcoin and Bitcoin Equivalent Mining Margin and Adjusted EBITDA are financial
measures not defined by IFRS. We believe Bitcoin and Bitcoin Equivalent Mining
Margin and Adjusted 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, Adjusted EBITDA removes such
effects of our capital structure, asset base and tax consequences, but
additionally excludes any unrealized foreign exchange gains or losses,
stock-based compensation charges and other one-time impairments and costs that
are not expected to be repeated in order to provide greater insight into the
cash flow being produced from our operating business, without the influence of
extraneous events. 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.
GROUP STATEMENT OF COMPREHENSIVE INCOME
Figures in '000 except per share Three Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
$ $
Revenues 7,458 10,407 36,713 34,403
Direct costs (6,891) (4,344) (24,660) (18,153)
Mining margin 567 6,063 12,053 16,250
Depreciation of mining equipment (2,252) (6,181) (11,919) (18,228)
Change in fair value of digital currencies (15) (635) (40) (146)
Gross profit (loss) (1,700) (753) 94 (2,124)
Operating costs and expenses (2,871) (3,079) (8,680) (10,942)
Restructuring and transaction related fees (291) (1,526) (1,409) (2,925)
Foreign exchange (299) (144) (293) 1,259
Loss on hedging (90) - (487) -
Depreciation/amortisation (216) (528) (664) (1,179)
Share based compensation 1,181 (920) (2,413) (2,809)
Operating profit (loss) (4,286) (6,950) (13,852) (18,720)
Gain on sale of subsidiary (Mirabel) - - 3,528 -
Gain on disposal of fixed assets - - (429) -
Finance costs (1,444) (2,763) (5,741) (9,100)
Impairment of intangible assets (288) - (514) -
Impairment of PPE (438) - (22,450) -
Other income 178 75 631 75
Equity accounted loss from associate - (259) - (717)
Profit/(loss) before taxation (6,278) (9,897) (38,827) (28,462)
Tax credit / (expense) - - (340) 2,321
Profit/(loss) after taxation (6,278) (9,897) (39,167) (26,141)
Other comprehensive income
Items which may be subsequently reclassified to profit or loss:
Currency translation reserve - 699 - (863)
Total other comprehensive income (loss), net of tax - 699 - (863)
Total comprehensive loss attributable to the equity holders of the Company (6,278) (9,198) (39,167) (27,004)
Earnings per share attributable to equity owners 617,186 523,450 589,644 493,201
Basic loss per share (0.01) (0.02) (0.07) (0.05)
The income statement has been prepared on the basis that all operations are
continuing operations.
GROUP STATEMENT OF FINANCIAL POSITION
As at September 30, As at December 31,
2024 2023
Figures in '000 $ $
ASSETS
Non-current assets
Investments at fair value through profit or loss 394 400
Intangible fixed assets 239 888
Property, plant and equipment 23,324 59,728
Total non-current assets 23,957 61,016
Current assets
Cash and cash equivalents 2,524 7,443
Trade and other receivables 2,970 3,835
Digital assets 12 385
Assets held for sale - 3,261
Total current assets 5,506 14,924
Total assets 29,463 75,940
EQUITY AND LIABILITIES
Equity
Share Capital 842 712
Share Premium 224,189 209,779
Share based payment reserve 13,497 12,166
Currency translation reserve (31,507) (30,129)
RSU/PSU Reserve 3,832 -
Accumulated surplus / (deficit) (230,628) (192.370)
Total equity (19,775) 158
Current liabilities
Trade and other payables 8,963 11,175
Loans and borrowings 1,219 14,320
Corporation Tax 423 -
Liabilities held for sale - 2,090
Total current liabilities 10,605 27,585
Non-current liabilities
Issued debt - bond 38,633 38,170
Loans - 10,027
Total liabilities 38,633 48,197
Total equity and liabilities 29,463 75,940
GROUP STATEMENT OF CASH FLOWS
Nine Months Ended September 30, Nine Months Ended September 30,
2024 2023
Figures in '000 $ $
Cash flows from operating activities
Loss before tax (38,671) (28,462)
Adjustments for:
Depreciation/Amortisation 12,582 19,407
Foreign exchange 9 (1,259)
Fair value change in digital assets through profit or loss 40 635
Revenue from digital assets (36,713) -
Impairment of Intangible assets 515 -
Impairment of Tangible assets 22,450 -
Realised loss in digital assets - (489)
Loss on hedging 397 -
Finance cost 5,740 9,100
Proceeds from Sale of Digital Assets 37,046 -
Interest Income (308) -
Share of equity accounted loss from associate - 717
Share based compensation 2,414 2,809
Gain on Disposal of fixed assets 429
Gain on sale of subsidiary (3,397) -
Cash flow from operating activities before working capital changes 2,533 2,458
Working capital changes:
Increase in trade and other receivables 457 (4,532)
Decrease in trade and other payables (2,013) (117)
Income taxes paid - 306
Net cash used in operating activities 977 (1,885)
Investing activities
Interest received 308 -
Proceeds from sale of tangible fixed assets 894 (1,590)
Proceeds from sale of intangibles and investments 6,119 989
Net cash used in investing activities 7,321 (601)
Financing activities
Proceeds from borrowing - 811
Increase in loans 1,026 -
Loan repayments (26,393) (8,417)
Interest paid (4,639) (8,015)
Proceeds from shares issued - net of issue costs 17,677 7,518
Net cash generated used in financing activities (12,329) (8,103)
Net decrease in cash and cash equivalents (4,031) (10,589)
Effect of foreign exchange on cash (888) (1,516)
Cash and cash equivalents, beginning of period 7,443 20,092
Cash and cash equivalents at end of period 2,524 7,987
The table below reconciles Adjusted EBITDA to net income/(loss), the most
directly comparable IFRS measure, for the three months ended 30 September 2024
and three months ended 30 September 2023.
Three Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Figures in '000 $ $ $ $
Net income/(loss) (6,278) (9,897) (39,167) (26,141)
Interest expense 1,444 2,763 5,741 9,100
Depreciation / amortisation 2,468 6,709 12,583 19,407
Income - - 340 (2,321)
EBITDA (2,366) (425) (20,503) 45
Restructuring and transaction related fees 291 1,526 1,409 2,925
Foreign exchange gain 299 144 293 (1,259)
Share based payment charge (1,181) 920 2,413 2,809
Impairment of intangible assets 288 - 514 -
Impairment of PPE 438 - 22,450 -
Loss on disposal of fixed assets - - 429 -
Gain on sale of investment - - (3,528) -
Loss on hedging 90 - 487 -
Equity accounted loss from associate - 259 - 717
Adjusted EBITDA (2,141) 2,424 3,964 5,237
For further information please contact:
Argo Blockchain
Investor Relations ir@argoblockchain.com
Tennyson Securities
Corporate Broker +44 207 186 9030
Peter Krens
Fortified Securities
Joint Broker +44 74930989014
Guy Wheatley, CFA guy.wheatley@fortifiedsecurities.com
(mailto:guy.wheatley@fortifiedsecurities.com)
Tancredi Intelligent Communication argoblock@tancredigroup.com (mailto:argoblock@tancredigroup.com)
UK & Europe Media Relations
About Argo:
Argo Blockchain plc is a dual-listed (LSE: ARB; NASDAQ: ARBK) blockchain
technology company focused on large-scale cryptocurrency mining. With mining
facilities in Quebec, mining operations in 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
(http://www.argoblockchain.com/) .
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