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
guy.wheatley@fortifiedsecurities.com
|
|
Tancredi Intelligent Communication
UK & Europe Media
Relations
|
argoblock@tancredigroup.com
|
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.
