Argo Blockchain PLC (ARBKF)

[kairos]

2020 Full Year Results

120% revenue and 5 times EBITDA growth delivers first annual profit

Argo Blockchain Plc, a global leader in cryptocurrency mining (LSE: ARB), is pleased to announce its audited results for the year ended 31 December 2020.
Financial highlights

? Revenue increased by 120% to £19.0m (2019: £8.6m)



? Total number of Bitcoins mined rose from 1,330 in 2019 to 2,465 in 2020, an 85% increase in annual production



? Mining margin 41% (2019: 60%) despite challenging market conditions, including Bitcoin halving in May 2020 and the global impact of the COVID-19 pandemic



· Administrative expenses were reduced by £1.1m to £2.4m as a result of series of cost reduction efforts



? Achieved EBITDA* of £7.9m in 2020 compared with EBITDA* of £1.4m in 2019



? Delivered net profit of £1.7m (2019: £0.7m net loss)



? Cash and digital assets held as at 31 December 2020 amounted to £6.7m (2019: £1.2m)



? As at 31st March 2021, the Group held 764 Bitcoin and equivalents valued at a £32.6m based on the Bitcoin price at that time



*Earnings before interest, tax, depreciation and amortisation


Operating highlights



? Strong execution of "smart growth" strategy by new leadership team under chief executive officer Peter Wall and executive chairman Ian MacLeod following their respective appointments in January 2020



? Mining capacity expanded from 210 petahash in January 2020 to 645 petahash on SHA-256 and from 180 Megasols to 280 Megasols on Equihash


Post balance sheet events



? All mining machines currently mining have achieved over 100% ROI*, including those installed in January and February of 2021



? Acquired 320 acres of land in west Texas for a total consideration of US$17.5m with access to some of the lowest-cost clean electricity to support a hosting facility project as part of the next phase of smart growth in 2022



? Raised £49m in new equity for investment in mining rigs, Texas development, blockchain/fintech ventures including a significant equity investment in Pluto Digital Assets Plc, and working capital



? Memorandum of understanding signed with DMG Blockchain Solutions to create Terra Pool, the first "green" Bitcoin mining pool to be powered by clean energy, in response to climate change concerns



? Shares admitted to trading on the OTCQB Venture Market in January 2021 and upgraded to trading on the OTCQX Best Market in February 2021



? On 2 February 2021, the Group signed a Sale and Purchase Agreement with GPUone for the purchase of two data centres in Quebec



? Q1 2021 was the most profitable quarter to date with 387 Bitcoin mined, revenues of £13.4 million and a mining margin of 81%



*ROI defined as yield of mining being greater than machine cost





Current Trading and Outlook



? Strong start to trading in Q1 2021 driven by rise in Bitcoin prices and stable mining difficulty



? Continued investment in new mining capacity, new ventures and strong balance sheet has positioned Argo for long-term growth



? Well placed to benefit from robust trading conditions amid buoyant demand for cryptocurrency







Commenting on the results, Peter Wall, CEO, said: "Argo crossed a major inflexion point in 2020 in its history by achieving full-year profitability on a 120% increase in revenue, our second consecutive year of triple-digit top-line growth. With a proven management team, world-class mining infrastructure, and strong tailwinds from the industry's recent growth, the Board looks forward to the future with great confidence."