Argo Blockchain Reports $240M Loss After Bitcoin Price Drop After CoinEdition

by Arthur · April 28, 2023

Argo Blockchain Reports 0M Loss After Bitcoin Price Drop After CoinEdition

UK-listed cryptocurrency miner Argo Blockchain faced a significant drop in profits in 2022 due to falling bitcoin prices.
In 2022, Argo Blockchain reported a net loss of $240 million and a loss per share of 40.98 pence per share.
Argo’s mining margin increased to 45%-50% in Q1, while daily bitcoin production increased by 5%.

In 2022, Argo Blockchain (ARB), which is the lone cryptocurrency miner listed in the UK, experienced a significant drop in profits due to the fall in bitcoin’s value and increased mining difficulty, leading to increased expenses while decreasing revenues.

The London-based firm revealed a net loss of 194.2 million British pounds ($240 million), or 40.98 pence per share, compared with 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 fell by over 60%.

Bitcoin miners had a tough year in 2022 as revenues fell, energy costs increased and mining difficulties increased. While some competitors filed for bankruptcy, Argo Blockchain avoided this by selling the 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 the mining rig.

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 operates two sites that collectively generate 20 megawatts of power, according to 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, the former CEO, Peter Wall, resigned almost three months ago.

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

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