Argo Blockchain plc Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Argo Blockchain plc Q1 2023 Earnings Summary

Financial Performance (vs. Q4 2022)

  • Revenue: $11.4 million, +15% increase from Q4 2022
  • Bitcoin mined: 491 BTC
  • Mining margin: 49% (up significantly from 35% in Q4 2022), translating to average cost of $11,811 per Bitcoin mined
  • Adjusted EBITDA: $1.6 million
  • Cash position: $14 million at March 31, 2023 (down $6 million from December 31, 2022); operating cash flow of $1.6 million offset by restructuring costs ($0.8M), working capital payments ($3.7M), and debt service/capex ($3.4M)
  • Non-mining operating expenses: Reduced 70% vs. quarterly average in H2 2022; now running at just over $1 million per month
  • Debt: $79 million (unchanged from December 31, 2022 levels)

Operational Highlights

  • All-in power and hosting costs: Below $0.05 per kWh across operations (better than prior guidance of $0.05–$0.055/kWh)
  • Core mining business profitable with positive operating cash flow
  • Quebec expansion: Signed agreement for additional 8 MW hydroelectric power at Baie Comeau facility; capacity expected online mid-to-late 2024
  • May hash price spike from Ordinals-driven transaction fees (fees rose to ~13% of revenue from typical 2–3%)

Strategic Priorities

  • Financial discipline and deleveraging via operating cash flow and non-core asset sales (real estate, digital assets, inventory)

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Operator: Good afternoon and welcome to the Argo Blockchain plc Q1 2023 Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in position to answer every question it received in the meeting itself. However, the company will review your questions later today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I would now like to hand you over to Tom Divine, Vice President of Investor Relations. Good afternoon, sir. Tom Divine: Thanks Alexandro. Before we begin, I would like to remind everyone that today's presentation and remarks may contain forward-looking statements. For our full risk factors, please see our Form 20-F filed with the Securities and Exchange Commission for the year 2022. I'd also like to point out that in our Q1 earnings and going forward, we will be reporting our financial results in U.S. dollars. With us today for our discussion of Q1 2023 results are Seif El-Bakly, Argo's Interim Chief Executive Officer; and Jim MacCallum, Argo's Chief Financial Officer. And now, I'll turn it over to Seif. Seif El-Bakly: Thanks, Tom. Hi, everyone and good morning, good afternoon. Seif here with my colleague Jim. Thanks for tuning in today for our Q1 2023 results. It wa

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