TORONTO, Nov. 11, 2021 /CNW/ - Hut 8 Mining Corp. (Nasdaq:
HUT) (TSX: HUT) ("Hut 8" or the "Company"), one of North America's largest, innovation-focused
digital assets mining pioneers, supporting open and decentralized
systems since 2018, is pleased to announce its financial results
for the quarter ending September 30,
2021 ("Q3-2021"). All dollar figures are in Canadian
Dollars ("CAD"), unless otherwise stated.
"The third quarter of 2021 proved to be another exciting and
dynamic step forward for Hut 8," commented Shane Downey, Chief Financial Officer of the
Company. "We are thrilled to have reported our third consecutive
record-breaking quarterly results and to have already surpassed our
goal of 5,000 Bitcoin held in reserve. Further, we have achieved an
important milestone with final delivery of all 10,000 NVIDIA chips.
Throughout early weeks of operation, these cutting-edge GPUs have
proven to be highly efficient, mining at a total cost of under
$3,000 per Bitcoin, delivering
margins of approximately 95%."
HASHRATE UPDATE
Hut 8 currently has an installed hashrate of approximately
1.7 EH/s, which includes the converted hashrate from our fleet of
NVIDIA GPUs.
Our total current and contracted capacity stands at
approximately 4.5 EH/s, which includes the converted hashrate from
our fleet of NVIDIA GPUs.
BITCOIN INVENTORY AND VALUE
As of September 30, 2021, the
Company had a total Bitcoin balance of 4,729 with a market value of
$263.8 million. Hut 8's Bitcoin
balance as of November 10, 2021,
including 2,000 Bitcoin loaned as part of the Company's fiat yield
strategy, is approximately 5,053 Bitcoin, reflecting a market value
of approximately $430 million. Hut 8
continues to strategically emphasize its "HODL" strategy, taking
active steps to generate Canadian and US dollars to help fund
operating expenses, so as to avoid selling Bitcoin. During
Q3-2021, 100% of self-mined Bitcoin was deposited into custody.
Q3-2021 HIGHLIGHTS
- Third consecutive record quarterly revenue, hitting
$50.3 million in Q3-2021, with our
self-mining operations generating $47.9
million of revenue and our expanded hosting service
generating $2.4 million. We mined 905
Bitcoin in Q3-2021, all of which was added to our self-mined
Bitcoin balance.
- As of November 10, 2021, the
entire fleet of high-performance NVIDIA chips has been received at
Hut 8's site in Medicine Hat,
Alberta, and 91% of the servers have been installed and
powered up, with full deployment expected in the next week. The
addition of the NVIDIA GPUs serves to increase Hut 8's aggregate
operating rate by approximately 1,600 Gigahash, which based on
current network dynamics, equates to an ASIC hashrate of
approximately 325 PH/s. The Company has deployed the NVIDIA GPUs to
mine the Ethereum network via Luxor pool, and consistent with our
HODL strategy, is receiving payouts in Bitcoin. Based on current
mining economics this equates to approximately 1.8 – 2.0 Bitcoin
per day, with an average cost to mine each Bitcoin of less than
$3,000, making this NVIDIA GPU fleet
the most profitable portion of Hut 8's self-mining operation.
- Following its successful listing on The Nasdaq Global Select
Market ("Nasdaq"), the Company benefitted from its access to an
increased pool of investors and closed a public offering of common
shares on September 17, 2021, raising
gross proceeds of $220 million
(US$173 million). The Company
anticipates the proceeds will be used to support the growth of its
business including to fund capital investments in digital asset
mining equipment in order to increase mining capacity, for working
capital, other general corporate purposes, and potentially for
strategic partnerships, joint ventures, or acquisitions.
- Based upon the capital flexibility afforded by the Company's
public offering of equity securities in September 2021, Hut 8 executed on a US$58.7 million purchase of 12,000 new MicroBT
M30S, M30S+ and M30S++ miners, representing a cost of approximately
$50/Terahash, with aggregate
incremental production of 1.17 EH/s. The miners are expected to be
delivered starting in January 2022,
at a delivery rate of approximately 1,000 machines per month, with
full deployment anticipated by December
2022.
- On October 23, 2021, the Company
announced that development of its third mining site, in conjunction
with Validus Power Corp. ("Validus), was underway in North Bay, Ontario, Canada. This site will
begin with 35MW of capacity and expected to be online by the end of
December 2021. Power will be
available on a physical off-take basis under the Company's power
purchase agreement with Validus, with a power rate of $0.0274/kWh subject to an annual adjustment
mechanism.
OPERATING AND FINANCIAL OVERVIEW
For the periods
ended September 30
|
Three Months
Ended
|
|
Nine Months
Ended
|
(CAD thousands,
except per share amounts)
|
2021
|
2020
|
|
2021
|
2020
|
Operating
results
|
|
|
|
|
|
|
|
|
|
Digital assets
mined
|
|
905
|
|
372
|
|
|
1,997
|
|
2,282
|
|
|
|
|
|
|
|
|
|
|
Financial
results
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
50,341
|
$
|
5,755
|
|
$
|
115,873
|
$
|
27,724
|
Net income
|
|
23,374
|
|
(900)
|
|
|
38,468
|
|
(8,290)
|
Mining profit
(i)
|
|
33,509
|
|
(2,276)
|
|
|
70,596
|
|
(539)
|
Adjusted EBITDA
(i)
|
|
30,720
|
|
(2,533)
|
|
|
61,328
|
|
(2,031)
|
|
|
|
|
|
|
|
|
|
|
Per
share
|
|
|
|
|
|
|
|
|
|
Net income -
basic
|
$
|
0.16
|
$
|
(0.01)
|
|
$
|
0.30
|
$
|
(0.09)
|
Net income -
diluted
|
$
|
0.15
|
$
|
(0.01)
|
|
$
|
0.28
|
$
|
(0.09)
|
(i) Non-IFRS measure
- see "Non-IFRS Measures" section below. Certain comparative
figures have been restated where necessary to conform with current
period presentation.
|
|
|
|
|
|
|
As At
|
(CAD
thousands)
|
|
|
|
|
|
September 30,
2021
|
December 31,
2020
|
Financial
position
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
$
|
223,225
|
$
|
2,816
|
Total digital
assets
|
|
|
|
|
|
|
263,832
|
|
101,962
|
Total
assets
|
|
|
|
|
|
|
651,207
|
|
145,202
|
Total
liabilities
|
|
|
|
|
|
|
21,890
|
|
29,647
|
Total shareholder's
equity
|
|
|
|
|
|
|
629,317
|
|
115,555
|
Working Capital
(i)
|
|
|
|
|
|
|
468,937
|
|
75,673
|
(ii) Calculated as
current assets less current liabilities.
|
- Revenue for Q3-2021 increased significantly to $50.3 million compared to $5.8 million in the prior year period. Strong
mining economics generated $47.9
million of revenue as a result of 905 Bitcoin mined versus
$5.3 million of revenue and 372
Bitcoin mined in the prior year period. Our hosting services
contributed $2.4 million of revenue
compared to $0.5 million in the prior
year period, reflecting management's strategic decision to on-board
two hosting customers.
- Site operating costs for Q3-2021 totaled $16.0 million versus $7.5
million in the prior year period. The increase reflects
power consumption from increased hash rate, and the fact that
mining equipment was operating at reduced capacity for much of the
third quarter of 2020, in response to compressed self-mining
economics.
- Net income in Q3-2021 was $23.4
million. The large increase in net income was primarily
driven by the revenue generated from the improved performance in
our self-mining operations, partially offset by higher costs from
the expansion of our business.
- Adjusted EBITDA (a "Non-IFRS Measure", please refer below) in
Q3-2021 was $30.7 million, versus an
Adjusted EBITDA loss of $2.5 million
in the prior year period, driven by the expansion of Hut 8's
operations and the improvement in Bitcoin mining economics.
- Digital assets consist of Bitcoin, which had a self-mined
balance of 4,729 Bitcoin and a market value of $263.8 million as of September 30, 2021. This balance consisted of
2,729 Bitcoin held in custody and 2,000 held under lending
arrangements.
NON-IFRS MEASURES
This press release makes reference to certain measures that are
not recognized under IFRS and do not have a standardized meaning
prescribed by IFRS. They are therefore not necessarily comparable
to similar measures presented by other companies. The Company uses
non-IFRS measures including "Adjusted EBITDA" and "Mining Profit"
as additional information to complement IFRS measures by providing
further understanding of the Company's results of operations from
Management's perspective.
"Adjusted EBITDA" represents EBITDA (net income or loss
excluding net finance income or expense, income tax or recovery,
depreciation, and amortization) adjusted to exclude non-cash
share-based compensation, fair value gain or loss on revaluation of
digital assets, non-recurring impairment charges or reversals of
impairment, and costs associated with one-time or non-recurring
transactions. Adjusted EBITDA is used to assess profitability
without the impact of non-cash accounting policies, capital
structure, taxation, and one-time or non-recurring transactions.
This performance measure provides a consistent comparable metric
for profitability of the Company across time periods.
"Mining profit" represents gross profit (revenue less cost of
revenue), excluding depreciation and revenue and site operating
costs directly attributable to hosting. Mining profit show
profitability of the Company's core digital asset mining operation,
without the impact of non-cash depreciation expense.
The following table reconciles net income (loss) to our non-IFRS
measure, Adjusted EBITDA:
For the periods
ended September 30
|
Three Months
Ended
|
|
Nine Months
Ended
|
(CAD
thousands)
|
2021
|
2020
|
|
2021
|
2020
|
Net income
(loss)
|
$
|
23,374
|
$
|
(900)
|
|
$
|
38,468
|
$
|
(8,290)
|
|
|
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
Net finance
costs
|
|
(186)
|
|
568
|
|
|
(1,173)
|
|
1,909
|
Depreciation and
amortization
|
|
5,192
|
|
3,545
|
|
|
13,972
|
|
17,513
|
Share based
payment
|
|
2,801
|
|
168
|
|
|
7,325
|
|
(480)
|
Revaluation of
digital assets
|
|
-
|
|
(5,578)
|
|
|
-
|
|
(13,714)
|
Gain on used of
digital assets
|
|
-
|
|
(198)
|
|
|
(182)
|
|
(1,801)
|
Foreign
exchange
|
|
759
|
|
(509)
|
|
|
1,402
|
|
773
|
Share based payment
taxes witholding
|
|
-
|
|
-
|
|
|
1,246
|
|
-
|
Sales tax
expense
|
|
4,001
|
|
371
|
|
|
5,802
|
|
1,517
|
One-time transaction
costs
|
|
455
|
|
-
|
|
|
823
|
|
542
|
Deferred income tax
recovery
|
|
(5,676)
|
|
-
|
|
|
(6,455)
|
|
-
|
Adjusted
EBITDA
|
$
|
30,720
|
$
|
(2,533)
|
|
$
|
61,228
|
$
|
(2,031)
|
The following table reconciles gross profit to our non-IFRS
measure, Mining profit:
For the periods
ended September 30
|
Three Months
Ended
|
|
Nine Months
Ended
|
(CAD
thousands)
|
2021
|
2020
|
|
2021
|
2020
|
Gross profit
(loss)
|
$
|
29,107
|
$
|
(5,331)
|
|
$
|
58,231
|
$
|
(17,562)
|
|
|
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
Revenue from
hosting
|
|
(2,406)
|
|
(490)
|
|
|
(6,024)
|
|
(490)
|
Site operating costs
attributable to hosting
|
|
1,616
|
|
-
|
|
|
4,417
|
|
-
|
Depreciation and
amortization
|
|
5,192
|
|
3,545
|
|
|
13,972
|
|
17,513
|
Mining
profit
|
$
|
33,509
|
$
|
(2,276)
|
|
$
|
70,596
|
$
|
(539)
|
|
|
|
|
|
(i) Non-IFRS measure
- see "Non-IFRS Measures" section above.
|
CONFERENCE CALL
Hut 8 Mining Q3 conference call will commence at 10:00 a.m. ET, today, November 11, 2021. Those wishing to join via
telephone should dial in 5 minutes early to the number below using
the confirmation number 50245577:
- 1 (866)-215-5508 Canada Toll Free
- For those joining from outside of Canada, a current list of available local and
international freephone telephone numbers can be found here:
International Dial In Numbers
Analyst Coverage of Hut 8 Mining:
A full list of Hut 8 Mining analyst coverage can be found
here:
https://hut8mining.com/investors/
FORWARD-LOOKING INFORMATION
This press release includes "forward-looking information" and
"forward-looking statements" within the meaning of Canadian
securities laws and United States
securities laws, respectively (collectively, "forward-looking
information"). All information, other than statements of historical
facts, included in this press release that address activities,
events or developments that the Company expects or anticipates will
or may occur in the future, including such things as future
business strategy, competitive strengths, goals, expansion and
growth of the Company's businesses, operations, plans and other
such matters is forward-looking information. Forward-looking
information is often identified by the words "may", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions and
includes, among others, statements regarding the anticipated
expansion of the current installed hashrate, the Company's
trajectory to produce additional Bitcoin, planned investments for
the balance of 2021 geopolitical impacts and the build-out of a new
power facility.
Forward-looking information is necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by Hut 8 as of the date of this press release, are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to the factors described in greater detail in the
"Risk Factors" section of the Company's Annual Information
Form dated March 25, 2021, which is
available on www.sedar.com. These factors are not intended to
represent a complete list of the factors that could affect Hut 8;
however, these factors should be considered carefully. There can be
no assurance that such estimates and assumptions will prove to be
correct. The forward-looking statements contained in this press
release are made as of the date of this press release, and Hut 8
expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or
assumptions underlying them, whether as a result of new
information, future events or otherwise, except as required by
law.
Neither the Toronto Stock Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Toronto
Stock Exchange) accepts responsibility for the adequacy or accuracy
of this release.
ABOUT HUT 8
Hut 8 is a digital asset mining company with industrial-scale
operations in Alberta,
Canada. The Company is one of North
America's largest innovation-focused digital asset miners,
supporting open and decentralized systems since 2018. Located in
energy rich Alberta, Canada, Hut 8
has one of the highest installed capacity rates in the industry and
holds more self-mined Bitcoin than any publicly traded company
globally. Hut 8 is executing on its strategy of mining and holding
Bitcoin, while building a diversified business and revenue strategy
to grow and protect shareholder value, regardless of Bitcoin price
action. The Company's multi-pronged business strategy includes
profitable digital asset mining, white-label high-performance
compute hosting, as well as yield & income programs leveraging
its Bitcoin held in reserve. Having demonstrated rapid growth and a
stellar balance sheet, Hut 8 was the first publicly traded miner on
the TSX and the first Canadian miner to be listed on The Nasdaq
Global Select Market. Hut 8's team of business building
technologists are believers in decentralized systems, stewards of
powerful industry-leading solutions, and drivers of innovation in
digital asset mining and high-performance computing, with a focus
on Environmental, Social and Governance ("ESG") standards
alignment. Through innovation, imagination, and passion, Hut 8 is
helping to define the digital asset revolution to create value and
positive impacts for its shareholders and generations to come.
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SOURCE Hut 8 Mining Corp