Argo Blockchain Drops to £194M Loss on Crypto Volatility – But Recent Rebound Helps Protect London-Listed Miners Margins
- Revenue fell 36% to £47.4m by 2022 as bitcoin lost more than 60% of its value last year
- Rising electricity prices at the Texas mining facility also depressed margins
- But the boss says the company is now in a “more solid” position following a rebound in bitcoin price
Argo Blockchain slumped to a heavy loss last year amid a decline in Bitcoin’s price and higher fees, despite an increase in the number of digital coins mined.
The London-listed bitcoin miner reported a net loss of £194 million for 2022, compared to a net income of £30.8 million in 2021 as revenue fell 36 percent to £47.4 million.
Margins fell to 54 percent from 84 percent a year earlier, weighed down by a fall in the price of bitcoin, which lost more than 60 percent of its value last year, as well as higher-than-expected energy costs at the Texel mining facility.
Argo’s CEO said the company is now “stronger and in a much more solid financial position.”
That’s despite the company mining a total of 2,156 bitcoins, a 5 percent increase from 2021.
Argo also mined 8 percent fewer bitcoins year-over-year in the first quarter of 2023, which it blamed on an “increase in network difficulty.”
However, margins jumped to about 45 to 50 percent, from 35 percent in the last quarter of 2022, thanks to the rebound in bitcoin’s price since the beginning of the year and falling electricity prices.
Bitcoin’s price is up more than 70 percent since the start of 2023, with the world’s largest and best-known cryptocurrency valued at $29,350 today, after surpassing $30,000 earlier this month for the first time since June.
However, it has halved in value since it surged above $60,000 in November 2021, ending 2022 up about 64 percent.
Falling cryptocurrency values have hit bitcoin miners hard, with some companies including Core Scientific and Celsius Mining filing for bankruptcy.
Recovery: The price of Bitcoin is up more than 70% since the beginning of 2023
In December, Argo Blockchain also warned it could go bankrupt, but then saved itself by selling its crypto mining facility, Helios, to Galaxy Digital for £54 million.
Argo said it will now focus on its business in Quebec, Canada, where it operates two sites supporting 200 megawatts of electricity.
It expects delivery of 2,870 new ‘BlockMiner’ machines over the course of the summer, which are expected to increase efficiency at the sites.
Interim chief executive, Seif El-Bakly, said: “After navigating challenging market conditions in both the crypto sector and the global economy in the second half of 2022, Argo has emerged stronger and in a much more solid financial position.
“Following the construction of Helios and the strategic transaction with Galaxy, we streamlined our operations to maximize efficiency and increase our hashrate while maintaining our mining capacity through our Hosting Agreement.
“Based on these foundations, we continue to work diligently on the next phase of Argo’s growth and development, with the goal of delivering long-term value to our shareholders.”
Argo Blockchain Shares were down nearly 5 percent to 12 pence during afternoon trading on Friday, having lost more than 80 percent of their value over the past year.