Argo Blockchain Plc(US:ARBK)2023-11-16 21:44Financial Data and Key Metrics Changes - The company generated revenue of $10.4 million in Q3 2023, a decrease of 17% compared to Q2 2023, primarily due to economic curtailment at Helios [9][15] - Adjusted EBITDA for the quarter was $3.1 million, an improvement from $1.1 million in Q2 2023 [10][16] - The mining margin was 58% for Q3, an increase from 36% in Q2 [15] - The average direct cost per Bitcoin was $11,736 [9] - Cash balance at the end of September was $8 million, with a net power receivable of $2.8 million [10][17] Business Line Data and Key Metrics Changes - The company mined 370 Bitcoin during the quarter [9] - Power credits accrued from economic curtailment amounted to $4.4 million, which helped offset revenue decreases [9][15] - Non-mining operating expenses were reduced by 11% compared to Q2 2023 [10][18] Market Data and Key Metrics Changes - The hash price bottomed out at around $60 per petahash per day during August and September but rebounded to over $90 per petahash per day in late October and November [6][16] - The global network hashrate increased approximately 70% over the year, reaching around 270 exahash per second at the start of the year [4] Company Strategy and Development Direction - The company focuses on financial discipline, operational excellence, and strategic partnerships for sustainable growth [4] - Key priorities include fleet efficiency, cost structure, and strengthening the balance sheet ahead of the 2024 Bitcoin halving [8] - The company is in advanced discussions to sell noncore assets as part of its deleveraging strategy [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment is challenging, with increasing network hashrate and fluctuating power prices impacting operations [4][5] - The company is optimistic about the trends in Bitcoin and hash prices, positioning itself to capitalize on these trends moving into 2024 [19] - Management emphasized the importance of efficiency and cost control to remain competitive post-halving [42] Other Important Information - The company raised $7.5 million in gross proceeds through an equity raise and reduced Galaxy debt by $5 million [10][18] - The deployment of ePIC BlockMiners in Quebec added around 300 petahash of capacity, bringing total hashrate capacity to 2.8 exahash per second [19][44] Q&A Session Summary Question: Hash price improvements and cash flow impact - Management indicated that every $10 increase in hash price generates an additional $2.5 million per quarter based on total hashrate capacity [24] Question: Debt reduction details - The $5 million debt reduction came from operating cash flow and proceeds from an equity raise [26] Question: Future growth options visibility - Management is in discussions with strategic partners and is focused on reducing debt and costs to be opportunistic [28] Question: Non-mining expenses reduction - Non-mining operating expenses were reduced due to lower insurance costs, professional fees, and salaries from reduced headcount [30] Question: ePIC BlockMiner performance - The ePIC BlockMiners are performing better than expected, averaging about 114 terahash per unit [32] Question: Capital structure and debt addressing - The company is exploring noncore asset sales and potential refinancing to strengthen the balance sheet [35] Question: Expansion plans in Canada - The company remains flexible and open to growth opportunities in various locations, including Canada [37] Question: Asset sales discussions timeline - Management anticipates sharing updates on asset sales discussions by the end of the year [39] Question: Network hashrate forecasts post-halving - Management expects many older-generation miners to go offline, which will impact overall hashrate [41] Question: Contribution of BlockMiner machines to hashrate - The increase to 2.8 exahash was due to the deployment of ePIC BlockMiners [44]