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Argo Blockchain Reports $240M Loss After Bitcoin Price Drop

source-logo  coinedition.com 28 April 2023 16:00, UTC

In 2022, Argo Blockchain (ARB), which is the solitary cryptocurrency miner listed in the U.K., experienced a significant decline in profits due to the drop in bitcoin’s value and the increased mining difficulty, which led to increased expenses while revenue declined.

The London-based firm disclosed a net loss of 194.2 million British pounds ($240 million), or 40.98 pence per share, in contrast to the previous year’s net income of 30.8 million pounds or 7.4 pence per share, according to a statement. Last year, the value of Bitcoin plummeted by over 60%.

Bitcoin miners had a tough year in 2022 as revenue declined, energy costs rose, and mining difficulty increased. While some competitors filed for bankruptcy, Argo Blockchain avoided this by selling its Helios mining facility in Texas to Galaxy Digital for $65 million and securing a $35 million loan from Michael Novogratz’s crypto-focused financial services firm, backed by its mining equipment.

In the first quarter, Argo’s mining margin increased to 45%-50%, up from 35% in the previous quarter, and its daily bitcoin production also increased by 5%. Going forward, the company will concentrate on its operations in Quebec, Canada, where it runs two sites that collectively generate 20 megawatts of power, as per its website.

Interim CEO Seif El-Bakly stated that Argo had managed to overcome difficult market conditions in both the crypto industry and the global economy during the second half of 2022 and was now in a stronger and more stable financial position. On the other hand, former CEO, Peter Wall, resigned almost three months ago.

Argo’s Helios site, which lacked a fixed-rate power agreement, experienced a sharp increase in costs during the 2022 energy crisis. To avoid bankruptcy, the company attempted to raise funds but ultimately opted to sell the site, which has the potential to reach 800 MW of power consumption. By the end of the year, Argo had 2.5 exahash/second (EH/s) of computing power, slightly lower than the 3.2 EH/s it had anticipated in August 2022.

Meanwhile, Argo’s plan to use Intel’s bitcoin mining ASICs with ePIC Blockchain has been disrupted as Intel has discontinued the product line. As a result, Argo’s shares fell 5% on the London Stock Exchange. However, Argo still expects to receive 2,870 units of the chips early in Q3.