Argo Blockchain Plc(US:ARBK)2024-08-28 17:33Financial Data and Key Metrics Changes - In Q2 2024, the company mined 188 Bitcoin, generating revenue of $12.4 million, a decrease from $16.8 million in Q1 2024 and consistent with $12.6 million in Q2 2023 [7][8] - Mining profit decreased from $6.4 million in Q1 2024 to $5 million in Q2 2024, with a mining margin of 41% in Q2 compared to 38% in Q1 [8][9] - The company recorded a $22 million non-cash impairment charge on its mining machines due to decreases in fair market values and changes in mining economics [9][25] Business Line Data and Key Metrics Changes - The company achieved a mining margin of 41% in Q2 2024, up from 38% in Q1 2024, despite lower revenue due to the Bitcoin halving [8][9] - Adjusted EBITDA for Q2 was $2.6 million, down from $3.8 million in Q1 2024 but up from $1.6 million in Q2 2023 [9] Market Data and Key Metrics Changes - The macroeconomic environment has influenced the Bitcoin mining sector, with central banks indicating a potential pause in interest rate hikes, providing some stability for miners [5] - Energy prices remain a concern due to geopolitical instability and supply chain disruptions, affecting operational costs for Bitcoin miners [5][6] Company Strategy and Development Direction - The company aims to focus on financial discipline, operational excellence, and growth, positioning itself to take advantage of opportunities for development [4] - The repayment of the $35 million Galaxy debt allows the company to explore growth opportunities and improve its balance sheet [10][12] - The company is analyzing potential growth opportunities at its Baie Comeau site, which could increase its hashrate capacity significantly [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding Bitcoin mining economics, believing the fundamentals of the network remain strong despite current challenges [33] - The company plans to continue focusing on low-cost and reliable power access while exploring strategic partnerships in the energy sector [17][18] Other Important Information - The company has reduced its operating expenses by over 70% compared to the second half of fiscal 2022, indicating strong cost management [14] - The sale of the Mirabel facility allowed the company to streamline operations and reduce non-mining operating expenses by $700,000 annually [13] Q&A Session Summary Question: Update on debt situation and fleet expansion - The Galaxy debt has been paid off, and the main outstanding debt is the baby bonds maturing in November 2026. The focus is on efficiency rather than raw growth in fleet expansion [20][21] Question: Future growth opportunities in Quebec - The company is considering growth opportunities at Baie Comeau and remains open to exploring partnerships and new site selections [22][23] Question: Details on the impairment charge - The impairment charge of $22 million reflects decreases in fair market values of mining equipment and changes in mining economics post-Bitcoin halving [24][25] Question: Outlook for Bitcoin mining economics - The company remains cautiously optimistic about Bitcoin mining economics, expecting improvements as operational efficiencies are realized [32][33] Question: Plans for dividends - There are no current plans to start paying dividends; excess cash will be used for debt repayment or future growth investments [38][39] Question: Update on the shareholder lawsuit - The company filed a motion to dismiss the shareholder lawsuit in March and is awaiting a court ruling [40][41]