REG - Argo Blockchain PLC - Q3 2023 Results
14/11/2023 07:15
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RNS Number : 3024T Argo Blockchain PLC 14 November 2023
Press Release
14 November 2023
Argo Blockchain plc
("Argo" or "the Company")
Q3 2023 Results
Argo Blockchain plc, a global leader in cryptocurrency mining (LSE: ARB;
NASDAQ: ARBK), is pleased to announce its results for the quarter ended 30
September 2023.
Financial Highlights ($USD)
● Accrued $4.4 million in power credits from economic curtailment at
Helios during periods of high electricity prices, which led to an increase in
mining margin from 36% in Q2 2023 to 58% in Q3 2023
● Decreased average direct cost per Bitcoin mined by 33% from $17,566
per Bitcoin in Q2 2023 to $11,736 per Bitcoin in Q3 2023
● Reduced recurring non-mining operating expenses by 11% in Q3 2023
compared to the prior quarter
● Achieved a positive Adjusted EBITDA of $3.1 million for the quarter
(Adjusted EBITDA of $5.4 million for the nine month period ending 30 September
2023)
● Mined a total of 370 Bitcoin and Bitcoin Equivalents (together,
"BTC") during the quarter and generated $10.4 million of revenue
● Reduced debt owed to Galaxy Digital from $32 million to $27 million
and ended the quarter with $70 million of debt outstanding
● Recorded a one-time non-cash charge of $1.2 million related to prior
period sales taxes owed to the Canadian tax authorities based on new tax
regulations
● Net loss was $9.9 million for Q3 2023
● The Company ended September 2023 with $8.0 million of cash and 32
BTC on its balance sheet.
Operating Highlights
● During the quarter, the Company completed the deployment of its
BlockMiner machines, representing approximately 0.3 EH/s in aggregate across
its two Quebec facilities
● The deployment of the BlockMiner machines increased the Company's
total hashrate capacity to 2.8 EH/s
● The Company is involved in advanced discussions to sell certain
non-core assets, and it continues to evaluate options for further reducing
debt
Management Commentary
Argo's interim Chief Executive Officer, Seif El-Bakly, said, "I am pleased
with Argo's operating and financial performance during the third quarter. The
ability of our mining machines to curtail operations at Helios during periods
of high electricity prices allowed us to generate significant power credits.
These power credits enabled us to achieve a fleet-wide all-in direct cost of
3.5 - 4 cents per kilowatt hour for the quarter, which contributed to a higher
mining margin and higher Adjusted EBITDA compared to the prior quarter."
Q3 Results Management Call
Argo will host a conference call to discuss its results at 10:00 ET / 15:00
GMT on Tuesday, 14 November 2023. The conference call is open to all existing
and potential shareholders, and the live webcast of the call can be accessed
via the Investor Meet Company platform. Questions can be submitted via
the Investor Meet Company dashboard during the live presentation.
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)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (UNAUDITED)
Three months ended 30 Sept 2023 Three months ended 30 Sept 2022 Nine months ended 30 Sept 2023 Nine months ended 30 Sept 2022
(unaudited) (unaudited) (unaudited) (unaudited)
$USD $'000 $'000 $'000 $'000
Revenues 10,407 13,097 34,403 47,741
Direct costs (8,770) (7,852) (23,863) (18,055)
Power credits 4,426 118 5,710 118
Mining margin 6,063 5,363 16,250 29,804
Depreciation of mining equipment (6,181) (763) (18,228) (14,844)
Change in fair value of digital currencies (635) (2,491) (146) (57,502)
Gross margin (753) 2,109 (2,124) (42,542)
Operating costs and expenses (3,079) (11,541) (10,942) (23,195)
Restructuring and one-time items (1,526) - (2,925) -
Foreign exchange (144) 2,232 1,259 15,551
Depreciation and amortisation (528) (4,729) (1,179) (5,852)
Share based payment (920) (2,754) (2,809) (6,408)
Operating loss (6,950) (14,683) (18,720) (62,446)
Finance cost (2,763) (2,560) (9,100) (7,071)
Other income 75 (798) 75 (994)
Equity accounted loss from associate (259) - (717) (636)
Revalue of contingent consideration - - - 5,239
Loss before taxation (9,897) (18,041) (28,462) (65,908)
Tax recovery - - 2,321 8,286
Net loss (9,897) (18,041) (26,141) (57,622)
Currency translation reserve 699 (30,792) (863) (36,518)
Equity accounted OCI from associate - 173 - (10,620)
Fair value loss on intangible digital assets - 537 - -
Total other comprehensive income (loss) 699 (30,082) (863) (47,138)
Total comprehensive loss (9,198) (48,123) (27,004) (104,760)
Weighted Average Shares outstanding '000 523,450 477,825 493,201 472,174
Basic earnings per share* $(0.02) $(0.04) $(0.05) $(0.12)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at As at
30 September 2023 31 December
(unaudited) 2022
(unaudited)
$USD $'000 $'000
ASSETS
Non-current assets
Investments at fair value through income and loss 426 414
Investments accounted for using the equity method 2,198 2,863
Intangible assets 785 2,103
Property, plant and equipment 63,923 76,992
Right of use assets 526 525
Total non-current assets 67,858 82,897
Current assets
Trade and other receivables 8,033 6,802
Digital assets 139 443
Cash and cash equivalents 7,987 20,092
Total current assets 16,159 27,337
Total assets 84,017 110,234
EQUITY AND LIABILITIES
Equity
Share capital 710 634
Share premium 209,545 202,103
Share based payment reserve 11,321 8,528
Foreign currency translation reserve (29,758) (28,895)
Accumulated surplus (deficit) (194,764) (168,623)
Total equity (2,946) 13,747
Current liabilities
Trade and other payables 9,802 10,028
Loans and borrowings 13,735 11,605
Deferred tax 3,820 2,648
Total current liabilities 27,357 24,281
Non - current liabilities
Deferred tax 4,806 7,941
Issued debt - bond 38,077 37,809
Loans and borrowings 16,180 25,916
Lease liability 543 540
Total non-current liabilities 59,606 72,206
Total equity and liabilities 84,017 110,234
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Nine months ended
30 September 2023
(unaudited)
$USD $'000
Cash flows from operating activities
Loss before tax (28,462)
Adjustments for:
Depreciation and amortisation 19,407
Foreign exchange movements (1,259)
Finance cost 9,100
Fair value change in digital assets 635
Realised loss in digital assets (489)
Share of equity accounted loss from associate 717
Share based payment expense 2,809
Working capital changes:
Increase in trade and other receivables (4,532)
Decrease in trade and other payables (117)
Decrease in digital assets 306
Net cash flow (used in)/from operating activities (1,885)
Investing activities
Proceeds from sale of intangibles/investments 989
Purchase of tangible fixed assets (1,590)
Net cash used in investing activities (601)
Financing activities
Proceeds from borrowings 811
Loan repayments (8,417)
Interest paid (8,015)
Proceeds from shares issued 7,518
Net cash from (used in)/from financing activities (8,103)
Net decrease in cash and cash equivalents (10,589)
Effect of foreign exchange changes in cash (1,516)
Cash and cash equivalents, beginning of period 20,092
Cash and cash equivalents, end of period 7,987
Non-IFRS Measures
The following table shows a reconciliation of mining margin percentage to gross margin, the most directly comparable IFRS measure, for the periods ended 30 September 2023 and 30 September 2022.
Three months ended Three months ended Nine months Nine months ended
ended
30 September 2023 30 September 2022 30 September 2023 30 September 2022
(unaudited) (unaudited) (unaudited) (unaudited)
$USD $'000 $'000 $'000 $'000
Gross margin (753) 2,109 (2,124) (42,542)
Gross margin percentage (7%) 16% (6%) (89%)
Depreciation of mining equipment 6,181 763 18,228 14,844
Change in fair value of digital currencies 635 2,491 146 57,502
Mining margin 6,063 5,363 16,250 29,804
Mining margin percentage 58% 41% 47% 62%
The following table shows a reconciliation of Adjusted EBITDA to net (loss) /
income, the most directly comparable IFRS measure, for the periods ended 30
September 2023 and 30 September 2022.
Three months ended Three months ended Nine months Nine months ended
ended
30 September 2023 30 September 2022 30 September 2023 30 September 2022
(unaudited) (unaudited) (unaudited) (unaudited)
$USD $'000 $'000 $'000 $'000
Net loss (9,897) (18,041) (26,141) (57,622)
Interest expense 2,763 2,560 9,100 7,071
Depreciation and amortisation 6,709 5,492 19,407 20,696
Income tax - - (2,321) (8,286)
Restructuring and one-time items 1,526 - 2,925 -
Foreign exchange 144 (2,232) (1,259) (15,551)
Share based payment 920 2,754 2,809 6,408
Change in fair value of digital currencies 635 2,491 146 57,502
Equity accounting loss from associate 259 - 717 636
Adjusted EBITDA 3,059 (6,976) 5,383 10,854
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.
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 7493 989014
Guy Wheatley, CFA guy.wheatley@fortifiedsecurities.com
Tancredi Intelligent Communication 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 (http://www.argoblockchain.com/)
www.argoblockchain.com (http://www.argoblockchain.com/) .
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