Argo Blockchain plc Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Argo Blockchain Q2 & H1 2023 Earnings Summary

Key Focus Areas: Financial discipline & deleveraging, operational excellence & growth, strategic partnerships. Presented by Interim CEO Seif El-Bakly and CFO Jim MacCallum.

Financial Highlights (Q2 2023 vs Q1 2023)

  • Bitcoin mined: 456 (no prior period comparison provided).
  • Revenue: $12.6 million, +10% from $11.45 million (implied) in Q1 2023.
  • Mining margin: 36%, down from 49% in Q1 2023 (due to higher power costs partially offset by $1.1 million in power credits from curtailment, equivalent to 38 additional BTC).
  • Adjusted EBITDA: $1.1 million in Q2; $2.3 million for H1 2023.
  • Non-mining operating expenses: Reduced 21% vs Q1 2023; cumulative 75% reduction since H2 2022.
  • Cash position: $9.1 million at June 30, 2023. Pro forma after July equity raise and debt paydown: $14.5 million.
  • Debt: Reduced by $3 million in Q2; additional ~$5 million reduction expected in Q3. Galaxy loan reduced via $1 million Ethereum sale (May) and $1.8 million from July raise.
  • Average power & hosting cost (H1 2023): Slightly over $0.05 per kWh.
  • Operating cash flow: Remained positive.

Operational & Strategic Updates

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Tom Divine: Thanks Alex. Before we begin, I’d 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. With us today for our discussion of Q2 and first half 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. Good morning everyone and good afternoon to our shareholders in the UK. It’s great to have you with us today to discuss our Q2 earnings and first half of 2023 results. As mentioned in previous calls, ever since Jim and I took the helm at Argo, we focused on three key priorities, which are financial discipline and deleveraging, operational excellence and growth, and strategic partnerships for the sustainable future of the Company. In my comments, I’ll provide updates on our progress as they relate to these key pillars. With that, let’s look at how Q2 shaped up. In the second quarter, we mined 456 Bitcoin and generated revenue of $12.6 million, which is an increase of 10% over a revenue from Q1 of this year. Our mining margin percentage came in at 36%, which is down from the 49% mining margin we achieved in Q1. There are a couple of drivers for this. So, I’ll take some time to address that now. Helios now has a fixed price PPA for a significant portion of the facility’s power l

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