Argo Blockchain plc Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Context: 2022 was a challenging year for Bitcoin miners due to declining BTC prices, network hashrate growth, energy market disruptions, and events like the collapses of Luna, Celsius, and FTX. Argo completed the Galaxy transaction in December 2022 to strengthen its balance sheet. All comparisons below are to FY2021 unless noted.

FY2022 Financial Highlights

  • Bitcoin Mined: 2,156 BTC at 54% average mining margin; average cost per BTC mined: $12,118
  • Revenue: $58 million (down 36% from $90 million)
  • Net Loss: $240 million (driven by non-recurring items: $56M Helios sale loss, $54M realized loss on lined Bitcoin, $61M asset impairments)
  • Adjusted EBITDA: $1 million (down from $68 million)

Galaxy Transaction & Cost Reductions (Completed Dec 2022)

  • Sold Helios facility for $65 million; used proceeds to pay down $41 million in debt (NYDIG loans fully repaid)
  • Interest expense reduced 24% (~$3 million annual cash flow savings)
  • G&A expenses reduced 44% (~$5 million annual cash flow savings) via headcount reduction (more than 50%)
  • Secured 2-year hosting agreement at Helios for 23,619 S19J Pro machines; Galaxy manages operations and power procurement with fixed hosting fee and shared demand response proceeds

Strategic Pillars (Post-Galaxy Focus)

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Operator: Good afternoon, ladies and gentlemen. Welcome to the Argo Blockchain plc Full-Year Results for 2022 Investor Presentation. Throughout this recorded presentation, investors will be in a listen-only mode. Questions are encouraged – going to be submitted at any time using the Q&A tab situated on the right hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in position given the attendance on today's call to answer every question it received in the meeting itself. However, the company can review your questions and we'll look at those responses and publish them where it's appropriate to do so. Before we begin, we would like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I'd now like to hand over to Vice President of Investor Relations, Tom Divine. Good afternoon. Tom Divine: Thanks, Mark. Before we begin, I want to remind everyone that today's presentation and remarks may contain forward-looking statements. With us today for our discussion of FY2022 results are Seif El-Bakly, Argo's Interim CEO; and Jim MacCallum, Argo's Chief Financial Officer. And now, I'll turn it over to Seif. Seif El-Bakly: Thanks, Tom. Thanks, Mark. Hi, everyone. Seif here with my colleague Jim, who Tom has mentioned our new CFO. It's great to be virtually presenting to everybody today, so thanks for tuning in. Just want to start off by saying we appreciate ever

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