Argo Blockchain plc (ARBK), is pleased to announce its audited results for the year ended 31 December 2021.
Financial highlights
- Revenue increased by 291% to $74.2 million [$100.1 million] (2020: $19.0 million [$25.6 million]), driven by a significant increase in Argo's hashrate, the temporary drop in difficulty on the Bitcoin network, and higher Bitcoin prices in 2021
- Mining margin* was 84% (2020: 41%); this was driven largely by an increase in the price of Bitcoin throughout 2021 and the drop in global hashrate following the Chinese ban on Bitcoin mining in May 2021
- Achieved EBITDA* of $52.9 million [$71.4 million] in 2021 compared with EBITDA* of �7.6 million [$10.3 million] in 2020, a 594% increase
- Delivered net income of $30.8m [$41.5 million], a 2,033% increase over the prior year (2020: �1.4 million [$1.9 million])
- Cash and digital assets held as at 31 December 2021 amounted to �92.6 million [$124.9 million] based on the Bitcoin price at that time
- Total number of Bitcoin mined was 2,045 in 2021, 17% lower than in 2020; this decrease is largely attributable to the halving event that occurred in May 2020 which reduced the block award from 12.5 to 6.25 Bitcoin per block
- As at 31 March 2022, the Group held 2,700 Bitcoin and Bitcoin Equivalents valued at �93.6 million [$122.9 million] based on the Bitcoin price at that time
*See Non-IFRS reconciliation.
Operating highlights
- Acquired the Helios project in Dickens County, Texas, which has an interconnection agreement for up to 800MW of power capacity; Phase 1 (initial 200MW), expected to be operational in May 2022
- Acquired two data centres in Quebec (Mirabel and Baie Comeau) from GPUone with a combined total of 20MW of power capacity
- Purchased 20,000 Bitmain S19J Pro mining machines with delivery and installation expected to occur in batches from May to October 2022
- Expanded Bitcoin mining capacity from 0.6 Exahash per second ("EH/s") to 1.6 EH/s
Financing highlights
- In Q1, raised �49.2 million [$66.4 million] in new equity via private placement for investment in mining rigs, Texas development, blockchain/fintech ventures including a significant equity investment in Pluto Digital Assets plc, and working capital
- In Q3, raised �94.8 million [$127.9 million] in new equity via a public offering on the Nasdaq Global Select Market, which significantly expanded our investor reach by expanding access to the US capital markets
- In Q4, raised �29.6 million [$40.0 million] in unsecured debt through the issuance of senior notes traded on the Nasdaq Global Select Market
Post balance sheet events
- Signed a supply agreement with Intel Corporation (NASDAQ:INTC) ("Intel") to purchase ASIC Blockscale chips
- Launched Argo Labs, our in-house innovation arm focused on strategic diversification and network participation in the broader web3 ecosystem
- Raised �19.8 million [$26.7 million] in debt from New York Digital Investment Group which is secured by electrical infrastructure equipment at Helios
- Executed an agreement to swap approximately 10,000 S19 machines being hosted at Core Scientific facilities for the equivalent hashrate of brand new S19J Pro machines to be delivered to the Helios facility in Texas. Upon completion of this swap, Argo will no longer have any machines hosted at third party facilities
Outlook for 2022 and Beyond
- Mining operations scheduled to begin at Helios in May 2022
- Expect to achieve 5.5 EH/s of hashrate capacity by the end of 2022. This increase is driven by the installation of the Bitmain S19J Pro machines and the deployment of custom-designed mining machines utilizing Intel's state-of-the-art ASIC Blockscale chips
- Additional capital spending to complete Helios Phase 1 is expected to be in the range of �93 million to �100 million ($125 million to $135 million), which will be financed primarily through debt and proceeds from selling a portion of our Bitcoin mined each month (non-dilutive to existing Argo shareholders)
- Beyond 2022, hashrate is expected to grow significantly to more than 20 EH/s over the next few years as the additional 600 MW of capacity at Helios is fully developed
Commenting on the results, Peter Wall, Argo CEO, said: "2021 was truly a year of transformation for Argo as we accomplished key milestones to strengthen the foundation of the Group and position us for long-term success through the acquisition of the Helios project and our dual listing on Nasdaq.
"The acquisition of Helios provided us with the opportunity to build a best-in-class, vertically-integrated facility with access to low-cost and sustainable electricity, which is unmatched by our peers. With our mining operations at Helios expected to commence in May, along with the development of custom mining machines using Intel's next-generation Blockscale ASIC chips, Argo is well-positioned to continue its growth with a focus on delivering for our shareholders. Onwards and upwards."