Press Release
20 November 2024
Argo Blockchain plc
("Argo" or "the Company")
Q3 2024 Results (Unaudited)
Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK), a global leader in cryptocurrency mining, announces its unaudited financial results for the quarter ended 30 September 2024. All $ amounts are in United States Dollars ("USD") unless otherwise stated.
Q3 2024 Financial Highlights:
● Revenue of $7.5 million and $36.7 million for the three and nine months ended 30 September 2024, respectively, compared to $10.4 million and $34.4 million for the prior year periods
● Total Bitcoin ("BTC") mined in the quarter was 123, or 1.3 BTC per day
● Mining margin percentage of 8% and 33% for the three and nine months ended 30 September 2024, respectively, compared to 58% and 47% for the prior year periods. The prior year periods benefited from significant power credits due to economic curtailments
● Net loss of $6.3 million and $39.2 million for the three and nine months ended 30 September 2024, respectively, compared to net loss of $9.9 million and $26.1 million for the prior year periods.
● Adjusted EBITDA of negative $2.1 million and positive $3.9 for the three and nine months ended 30 September 2024, respectively, compared to positive EBITDA of $2.4 million and $5.2 million for the prior year periods.
● The Company ended the quarter with cash of $2.5 million and held four BTC or BTC Equivalent.
● Reduced debt by $12.4 million during the quarter, including the full repayment of the Galaxy loan.
Post-period Updates:
· On 11 October 2024, the Company announced that the class action lawsuit, Murphy vs. Argo Blockchain plc et al, filed in the Eastern District of New York on 26 January 2023, and transferred to the Southern District of New York on 4 August 2023, was dismissed on 9 October 2024, with prejudice and without leave to amend.
● On 7 November 2024, the Company announced that it has entered a non-binding letter of intent ("LOI") with BE Global Development Limited ("BE"), a specialist in High Performance Computing (HPC) solutions, to explore a significant expansion at the Company's owned and operated Baie-Comeau facility.
● On 7 November 2024, despite ongoing discussions with Galaxy to renew the Company's current hosting agreement at Helios, the Company was informed by Galaxy that it did not intend to renew the contract beyond the current end date of 28 December 2024, as such we are currently in discussions regarding our miners located at Helios.
Management Commentary:
Thomas Chippas, Chief Executive Officer of Argo, said: "The third quarter was a difficult quarter for BTC miners, including Argo. It is positive that we have seen improvement in BTC mining economics in October, as noted in our October Operations Update, and that this has continued into November which has also been strong. The High Performance Computing hosting opportunity at our Baie Comeau facility is exciting and demonstrates our ability to diversify our capabilities beyond BTC into the growing AI computational market. At this juncture for the industry, we are keenly focused on growth opportunities that play to our deep expertise."
Earnings Conference Call
Argo will host a conference call to discuss its results at 10:00 ET / 15:00 GMT today, Wednesday 20 November 2024. The live webcast of the call can be accessed via the Investor Meet Company platform.
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
Investors already following Argo Blockchain on the Investor Meet Company platform will be invited automatically.
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.
Non-IFRS Measures
Bitcoin and Bitcoin Equivalent Mining Margin and Adjusted EBITDA are financial measures not defined by IFRS. We believe Bitcoin and Bitcoin Equivalent Mining Margin and Adjusted EBITDA have limitations as analytical tools. In particular, Bitcoin and Bitcoin Equivalent Mining Margin excludes the depreciation of mining equipment and so does not reflect the full cost of our mining operations, and it also excludes the effects of fluctuations in the value of digital currencies and realized losses on the sale of digital assets, which affect our IFRS gross profit. Further, Adjusted EBITDA removes such effects of our capital structure, asset base and tax consequences, but additionally excludes any unrealized foreign exchange gains or losses, stock-based compensation charges and other one-time impairments and costs that are not expected to be repeated in order to provide greater insight into the cash flow being produced from our operating business, without the influence of extraneous events. These measures should not be considered as an alternative to gross margin or net income/(loss), as applicable, determined in accordance with IFRS, or other IFRS measures. These measures are not necessarily comparable to similarly titled measures used by other companies. As a result, you should not consider these measures in isolation from, or as a substitute analysis for, our gross margin or net income/(loss), as applicable, as determined in accordance with IFRS.
GROUP STATEMENT OF COMPREHENSIVE INCOME
| Figures in '000 except per share | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|
| $ | $ | |
|
| | | | | |
| Revenues | 7,458 | 10,407 | 36,713 | 34,403 |
| Direct costs | (6,891) | (4,344) | (24,660) | (18,153) |
| Mining margin | 567 | 6,063 | 12,053 | 16,250 |
| Depreciation of mining equipment | (2,252) | (6,181) | (11,919) | (18,228) |
| Change in fair value of digital currencies | (15) | (635) | (40) | (146) |
| Gross profit (loss) | (1,700) | (753) | 94 | (2,124) |
| | | | | |
| Operating costs and expenses | (2,871) | (3,079) | (8,680) | (10,942) |
| Restructuring and transaction related fees | (291) | (1,526) | (1,409) | (2,925) |
| Foreign exchange | (299) | (144) | (293) | 1,259 |
| Loss on hedging | (90) | - | (487) | - |
| Depreciation/amortisation | (216) | (528) | (664) | (1,179) |
| Share based compensation | 1,181 | (920) | (2,413) | (2,809) |
| Operating profit (loss) | (4,286) | (6,950) | (13,852) | (18,720) |
| | | | | |
| Gain on sale of subsidiary (Mirabel) | - | - | 3,528 | - |
| Gain on disposal of fixed assets | - | - | (429) | - |
| Finance costs | (1,444) | (2,763) | (5,741) | (9,100) |
| Impairment of intangible assets | (288) | - | (514) | - |
| Impairment of PPE | (438) | - | (22,450) | - |
| Other income | 178 | 75 | 631 | 75 |
| Equity accounted loss from associate | - | (259) | - | (717) |
| Profit/(loss) before taxation | (6,278) | (9,897) | (38,827) | (28,462) |
| | | | | |
| Tax credit / (expense) | - | - | (340) | 2,321 |
| | | | | |
| Profit/(loss) after taxation | (6,278) | (9,897) | (39,167) | (26,141) |
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
| Items which may be subsequently reclassified to profit or loss: | | | | |
| Currency translation reserve | - | 699 | - | (863) |
| Total other comprehensive income (loss), net of tax | - | 699 | - | (863) |
| Total comprehensive loss attributable to the equity holders of the Company | (6,278) | (9,198) | (39,167) | (27,004) |
| Earnings per share attributable to equity owners | 617,186 | 523,450 | 589,644 | 493,201 |
| Basic loss per share | (0.01) | (0.02) | (0.07) | (0.05) |
The income statement has been prepared on the basis that all operations are continuing operations.
GROUP STATEMENT OF FINANCIAL POSITION
|
| As at September 30, 2024 |
| As at December 31, 2023 |
| Figures in '000 | $ |
| $ |
| | | | |
| ASSETS | | | |
| Non-current assets | | | |
| Investments at fair value through profit or loss | 394 | | 400 |
| Intangible fixed assets | 239 | | 888 |
| Property, plant and equipment | 23,324 | | 59,728 |
| Total non-current assets | 23,957 |
| 61,016 |
| | | | |
| Current assets | | | |
| Cash and cash equivalents | 2,524 | | 7,443 |
| Trade and other receivables | 2,970 | | 3,835 |
| Digital assets | 12 | | 385 |
| Assets held for sale | - | | 3,261 |
| Total current assets | 5,506 |
| 14,924 |
| | | | |
| Total assets | 29,463 |
| 75,940 |
| | | | |
| EQUITY AND LIABILITIES | | | |
| Equity | | | |
| Share Capital | 842 | | 712 |
| Share Premium | 224,189 | | 209,779 |
| Share based payment reserve | 13,497 | | 12,166 |
| Currency translation reserve | (31,507) | | (30,129) |
| RSU/PSU Reserve | 3,832 | | - |
| Accumulated surplus / (deficit) | (230,628) | | (192.370) |
| Total equity | (19,775) |
| 158 |
| | | | |
| Current liabilities | | | |
| Trade and other payables | 8,963 | | 11,175 |
| Loans and borrowings | 1,219 | | 14,320 |
| Corporation Tax | 423 | | - |
| Liabilities held for sale | - | | 2,090 |
| Total current liabilities | 10,605 |
| 27,585 |
|
Non-current liabilities | | | |
| Issued debt - bond | 38,633 | | 38,170 |
| Loans | - | | 10,027 |
| Total liabilities | 38,633 |
| 48,197 |
| | | | |
| Total equity and liabilities | 29,463 |
| 75,940 |
GROUP STATEMENT OF CASH FLOWS
| | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
| Figures in '000 | $ | $ |
| Cash flows from operating activities | | |
| Loss before tax | (38,671) | (28,462) |
| Adjustments for: | | |
| Depreciation/Amortisation | 12,582 | 19,407 |
| Foreign exchange | 9 | (1,259) |
| Fair value change in digital assets through profit or loss | 40 | 635 |
| Revenue from digital assets | (36,713) | - |
| Impairment of Intangible assets | 515 | - |
| Impairment of Tangible assets | 22,450 | - |
| Realised loss in digital assets | - | (489) |
| Loss on hedging | 397 | - |
| Finance cost | 5,740 | 9,100 |
| Proceeds from Sale of Digital Assets | 37,046 | - |
| Interest Income | (308) | - |
| Share of equity accounted loss from associate | - | 717 |
| Share based compensation | 2,414 | 2,809 |
| Gain on Disposal of fixed assets | 429 | |
| Gain on sale of subsidiary | (3,397) | - |
| Cash flow from operating activities before working capital changes | 2,533 | 2,458 |
|
| | |
| Working capital changes: | | |
| Increase in trade and other receivables | 457 | (4,532) |
| Decrease in trade and other payables | (2,013) | (117) |
| Income taxes paid | - | 306 |
| Net cash used in operating activities | 977 | (1,885) |
| | | |
| Investing activities | | |
| Interest received | 308 | - |
| Proceeds from sale of tangible fixed assets | 894 | (1,590) |
| Proceeds from sale of intangibles and investments | 6,119 | 989 |
| Net cash used in investing activities | 7,321 | (601) |
| | | |
| Financing activities | | |
| Proceeds from borrowing | - | 811 |
| Increase in loans | 1,026 | - |
| Loan repayments | (26,393) | (8,417) |
| Interest paid | (4,639) | (8,015) |
| Proceeds from shares issued - net of issue costs | 17,677 | 7,518 |
| Net cash generated used in financing activities | (12,329) | (8,103) |
|
| | |
| Net decrease in cash and cash equivalents | (4,031) | (10,589) |
| Effect of foreign exchange on cash | (888) | (1,516) |
| Cash and cash equivalents, beginning of period | 7,443 | 20,092 |
| Cash and cash equivalents at end of period | 2,524 | 7,987 |
| | | |
The table below reconciles Adjusted EBITDA to net income/(loss), the most directly comparable IFRS measure, for the three months ended 30 September 2024 and three months ended 30 September 2023.
| | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
| Figures in '000 | $ | $ | $ | $ |
| | | | | |
| Net income/(loss) | (6,278) | (9,897) | (39,167) | (26,141) |
| | | | | |
| Interest expense | 1,444 | 2,763 | 5,741 | 9,100 |
| Depreciation / amortisation | 2,468 | 6,709 | 12,583 | 19,407 |
| Income | - | - | 340 | (2,321) |
| EBITDA | (2,366) | (425) | (20,503) | 45 |
| Restructuring and transaction related fees | 291 | 1,526 | 1,409 | 2,925 |
| Foreign exchange gain | 299 | 144 | 293 | (1,259) |
| Share based payment charge | (1,181) | 920 | 2,413 | 2,809 |
| Impairment of intangible assets | 288 | - | 514 | - |
| Impairment of PPE | 438 | - | 22,450 | - |
| Loss on disposal of fixed assets | - | - | 429 | - |
| Gain on sale of investment | - | - | (3,528) | - |
| Loss on hedging | 90 | - | 487 | - |
| Equity accounted loss from associate | - | 259 | - | 717 |
| Adjusted EBITDA | (2,141) | 2,424 | 3,964 | 5,237 |
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 Guy Wheatley, CFA | +44 74930989014 |
| Tancredi Intelligent Communication 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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