TIDMARB
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
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
(UNAUDITED)
Three Three Nine Nine
months months months months
ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept
2023 2022 2023 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 - 537 - -
digital assets
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 31 December
2023
(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 Three months Nine months Nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2023 2022 2023 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 Three months Nine months Nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2023 2022 2023 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
Peter Krens +44 207 186 9030
---------------------------------------
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 www.argoblockchain.com
.
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