In the latest financial report, Argo Blockchain plc (LSE: ARGO), a publicly-listed cryptocurrency mining company, detailed a period of mixed financial results for Q3 2023. The company implemented strategic measures that led to improved operational efficiency and cost reductions notwithstanding a net loss over the same period.
Q3 Performance Uptick for Argo Blockchain amidst Market Challenges
Argo Blockchain capitalized on economic curtailment strategies at its Helios facility to accrue $4.4 million in power credits against high electricity prices, contributing to a mining margin increase to 58% in Q3 from 36% in Q2 2023.
Moreover, the company reduced the average direct cost per Bitcoin (BTC) mined by 33%, from $17,566 to $11,736. The firm also reported a reduction of 11% in recurring non-mining operating expenses and a positive Adjusted EBITDA of $3.1 million for the quarter, with a nine-month tally of $5.4 million.
????Argo's Q3 2023 results are out!????Highlights:????$4.4m in power credits from curtailment in TX????Grew Adj. EBITDA by 185% to $3.1m????58% mining margin????Reduced debt by $5m????Increased total hashrate capacity by 12% to 2.8 EH/sFull RNS: https://t.co/sPpRBKozIZ#ARB $ARBK
— Argo (@ArgoBlockchain) November 14, 2023
"I am pleased with Argo's operating and financial performance during the third quarter," Seif El-Bakly, the interim Chief Executive Officer at Argo, said. "The ability of our mining machines to curtail operations at Helios during periods of high electricity prices allowed us to generate significant power credits."
Operationally, the completion of BlockMiner machine deployment was a highlight, enhancing the company's total hash rate capacity to 2.8 EH/s. Revenue from mining 370 BTC and BTC Equivalents amounted to $10.4 million. Argo made strides in debt management by reducing its Galaxy Digital debt from $32 million to $27 million, finishing the quarter with $70 million in total debt.
Argo's Financial Obstacles
Despite these operational successes, Argo Blockchain faced financial challenges, marked by a net loss of $9.9 million for the quarter. The company incurred a one-time non-cash charge of $1.2 million due to a reevaluation of prior period sales taxes under new Canadian regulations. Argo held $8.0 million in cash at the quarter's close and 32 BTC on its balance sheet.
Excluding the power credits, which accounted for nearly half of the company's revenues, the latest income would turn out to be worse than in the second quarter. In terms of the first nine months of 2023, they also fell short of the same period in the previous year. Year to date, the income totaled $34,403, a decrease from 2022’s figure of $47,741.
The results are consistent with those reported for the first half of 2023 when Argo mined more but earned less, with a net loss for the six-month period amounting to $18.8 million.
This article was written by Damian Chmiel at www.financemagnates.com.
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