Argo Blockchain sinks to full-year loss on BTC price slide

Argo Blockchain (ARB), the only UK-listed cryptocurrency miner, fell to a full-year loss in 2022 as the price of bitcoin (BTC) fell and the difficulty of mining increased, driving up costs as revenues fell.

The London-based company reported a net loss of 194.2 million British pounds ($240 million), or 40.98 pence per share, compared with net income of 30.8 million pounds, or 7.4 pence, a year earlier, it said it in a statement. Bitcoin price fell more than 60% last year.

Miners across the board struggled in 2022 as revenues fell along with the bitcoin price while energy costs rose and the difficulty of mining a bitcoin block, which is when they are rewarded, increased. While rivals such as Core Scientific and Compute North filed for bankruptcy protection, Argo avoided the same fate by agreeing to sell the Helios mining facility in Dickens Country, Texas, to Galaxy Digital for $65 million. It also negotiated a new $35 million loan from investor Michael Novogratz’s crypto-focused financial services firm, secured by the mining equipment.

Argo’s mining margin increased to 45-50% in the first quarter from 35% in the fourth quarter, while daily bitcoin production rose 5%. Argo said it will now focus on its operations in Quebec, Canada, where it operates two sites totaling 20 megawatts (MW) of power, according to its website.

“After navigating challenging market conditions in both the crypto sector and the global economy in the second half of 2022, Argo has emerged stronger and in a much more solid financial position,” interim CEO Seif El-Bakly said in the statement. Peter Wall resigned as CEO almost three months ago.

The flagship Helios site did not have a fixed-rate power agreement, which meant costs rose sharply amid the 2022 energy crisis. Argo tried to raise funds to avoid bankruptcy, and ultimately decided to sell the site, which has the potential to reach 800 MW power consumption.

The firm ended the year with 2.5 exahash/second in computing power, slightly less than the 3.2 EH/s it predicted in August 2022.

Argo said it expects to receive 2,870 units of the Intel-based chips early in the third quarter.

Shares in the company fell 5% from mid-morning on the London Stock Exchange.

UPDATE (April 28, 9:51 UTC): Adds background on the mining industry in the third paragraph, information on the first quarter of the fourth, details on Helios, ePIC Blockchain collaboration, Quebec websites.