VANCOUVER, BC / ACCESSWIRE / November 30, 2020 / HIVE Blockchain Technologies Ltd. (TSX.V:HIVE)(OTCQX:HVBTF)(FSE: HBF) (the "Company" or "HIVE") announces its results for the second quarter ended September 30, 2020 (all amounts in US dollars, unless otherwise indicated).
Revenue from digital currency mining was $13.0 million, an 8% increase from the same quarter last year. Record cash flow of $10.6 million, up significantly from a loss of $4.6 a year earlier. Gross mining margin expanded to $9.2 million, from a loss of more than $560,000 last year. Net income per share grew to $0.03 from a loss of $0.04 during the period ended September 30.
"I'm thrilled to see how well HIVE has done since we settled all disputes with Genesis Mining in June 2019," comments Frank Holmes, Interim Executive Chairman of HIVE. "We've been able to drive down costs, which has led to the highest cash flow in any one quarter since HIVE went public three years ago. This, coupled with higher Ethereum and crypto prices, means that the Company is doing better now than ever before.
"2020 has been marked by healthy expansion in mining capacity, the most recent example being HIVE's potential acquisition of a data center campus in Grand Falls, New Brunswick, that would give the company access to an additional 50 megawatts (MW) of low-cost green energy. Additionally, we recently locked in 50% of our energy costs for calendar 2021 at 1.6 cents per kilowatt hour in Sweden. This data point is one of the lowest in the blockchain mining ecosystem as well as in green energy.
"As we explained back in September of this year, the Company produced a record number of Ethereum coins through the continued strong usage of the blockchain network, notably decentralized finance ("DeFi") applications. In the quarter ended September 30, HIVE mined over 32,800 Ethereum and 88,300 Ethereum Classic coins. This represents a significant increase from the 25,000 Ethereum mined in the previous quarter, and a more than 50% increase compared to the same period last year."
"HIVE is the only public crypto mining company producing Ethereum on an industrial scale, sourcing green energy from facilities in Sweden and Iceland. With the explosion in DeFi, which has increased the demand for Ethereum, and now the debut of Ethereum 2.0, which will shrink the supply of Ethereum, we are in a very attractive position," continues Mr. Holmes.
Q2 F2021 Highlights
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Generated income from digital currency mining of $13.0 million, an increase of 8.2% year-over-year
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Generated gross mining margin[1] of $9.2 million, or 71% of income from digital currencies
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Mining output of newly minted digital currencies:
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32,800 Ethereum
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88,300 Ethereum Classic
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89 Bitcoin
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Generated Adjusted EBITDA1 of $10.6 million, a significant increase from a loss of $4.6 million a year earlier
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Generated net income of $9.2 million for the period, or $0.03 per share, compared to a loss of $11.5 million, or $0.04 per share, last year
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Net cash less loans payables of $1.7 million plus digital currencies assets of $10.7 million, as at September 30, 2020
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Working capital was $20.9 million as at September 30, 2020
Q2 F2021 Financial Review
For the three months ended September 30, 2020, income from digital currency mining was $13.0 million, an increase of 8.2% from the prior comparative quarter. The increase was primarily due to an increased number of Ethereum coins mined during the current quarter and a realization of higher average Ethereum prices than the prior comparative quarter.
Gross mining margin1 during the quarter was $9.2 million, or 71% of income from digital currency mining, compared to a loss of $563,839, or 5% of income from digital currency mining, in the same period in the prior year.
Net income during the quarter ended September 30 was $9.2 million, or $0.03 per share, compared to a loss of $11.5 million, or $0.04 per share, in the prior year period. The increase was primarily due to a significant reduction of operational costs experienced since the Company has shifted from the former service provider over the past year.
| | | Three months ended
September 30, | | | Six months ended
September 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| Income from digital currency mining | | $ | 12,989,592 | | | $ | 12,007,978 | | | $ | 19,569,874 | | | $ | 21,131,608 | |
| Operating and maintenance costs of digital currency mining | | | (3,780,716 | ) | | | (12,571,817 | ) | | | (7,767,987 | ) | | | (18,126,792 | ) |
| Gross Mining Margin1 | | | 9,208,876 | | | | (563,839 | ) | | | 11,801,887 | | | | 3,004,816 | |
| Gross Mining Margin %1 | | | 71 | % | | | -5 | % | | | 60 | % | | | 14 | % |
| | | | | | | | | | | | | | | | | |
| Depreciation | | | (1,796,774 | ) | | | (1,252,072 | ) | | | (3,426,643 | ) | | | (2,505,029 | ) |
| Gross gain (loss) | | | 7,412,102 | | | | (1,815,911 | ) | | | 8,375,244 | | | | 499,787 | |
| | | | | | | | | | | | | | | | | |
| Revaluation of digital currencies2 | | | 993,902 | | | | (4,806,346 | ) | | | 2,319,766 | | | | (1,912,515 | ) |
| Gain (loss) on sale of digital currencies | | | 1,729,821 | | | | (589,404 | ) | | | 2,477,287 | | | | 153,721 | |
| Hosting revenues | | | 191,800 | | | | - | | | | 191,800 | | | | - | |
| | | | | | | | | | | | | | | | | |
| General and administrative expenses | | | (183,660 | ) | | | (1,366,341 | ) | | | (1,128,220 | ) | | | (2,665,456 | ) |
| Foreign exchange | | | (302,943 | ) | | | (2,052,200 | ) | | | (85,418 | ) | | | (3,162,619 | ) |
| Share-based compensation | | | (514,438 | ) | | | (15,019 | ) | | | (910,427 | ) | | | (308,899 | ) |
| | | | | | | | | | | | | | | | | |
| Realized (loss) gain on investments | | | - | | | | (828,044 | ) | | | - | | | | 1,531,464 | |
| Finance expense | | | (115,611 | ) | | | (53,557 | ) | | | (230,365 | ) | | | (107,522 | ) |
| Net income (loss) from continuing operations | | $ | 9,210,973 | | | $ | (11,526,822 | ) | | $ | 11,009,667 | | | $ | (5,972,039 | ) |
| | | | | | | | | | | | | | | | | |
| EBITDA1 | | $ | 11,123,358 | | | $ | (9,393,149 | ) | | $ | 14,666,675 | | | $ | (4,890,952 | ) |
| Adjusted EBITDA1 | | $ | 10,643,894 | | | $ | (4,571,784 | ) | | $ | 13,257,336 | | | $ | (2,669,538 | ) |
| | | | | | | | | | | | | | | | | |
| Diluted income (loss) per share | | $ | 0.03 | | | $ | (0.04 | ) | | $ | 0.03 | | | $ | (0.02 | ) |
| | | | | | | | | | | | | | | | | |
| Net cash inflows from operating activities | | $ | 5,442,119 | | | $ | 294,969 | | | $ | 5,915,421 | | | $ | 1,188,093 | |
| Net cash inflows (outflows) from investing activities | | $ | (412,372 | ) | | $ | - | | | $ | (4,095,324 | ) | | $ | - | |
| Net cash inflows (outflows) from financing activities | | $ | (288,374 | ) | | $ | 83,168 | | | $ | (554,483 | ) | | $ | 306,712 | |
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| | | | | | | | | | | | | | | | | |
| As at | | September 30, 2020 | | | March 31, 2020 | | | | | | | | | |
| Total assets | | $ | 46,686,214 | | | $ | 29,104,363 | | | | | | | | | |
| Total non-current liabilities | | $ | 1,540,462 | | | $ | 775,480 | | | | | | | | | |
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Non-IFRS measure. A reconciliation to its nearest IFRS measures is provided under "Reconciliations of Non-IFRS Financial Performance Measures" in the Company's MD&A.
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Revaluation is calculated as the change in value (gain or loss) on the coin inventory. When coins are sold, the net difference between the proceeds and the carrying value of the digital currency (including the revaluation), is recorded as a gain (loss) on the sale of digital currencies
Financial Statements and MD&A
The Company's Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) thereon for the three and six months ended September 30, 2020 will be accessible on SEDAR at www.sedar.com under HIVE's profile, and on the Company's website at www.HIVEblockchain.com.
Webcast Details
Management will host a webcast on Tuesday, December 1, 2020 at 10:00 am Eastern Time to discuss the Company's financial results. Presenting on the webcast will be Frank Holmes, Interim Executive Chairman, Tobias Ebel, HIVE Director and Darcy Daubaras, Chief Financial Officer. IMPORTANT - Click here to register for the webcast. The direct link is https://us02web.zoom.us/webinar/register/5016067617624/WN_D7CDFKAtRh6M1b3XxpILIA.
About HIVE Blockchain Technologies Ltd.
HIVE Blockchain Technologies Ltd. is a growth oriented, TSX.V-listed company building a bridge from the blockchain sector to traditional capital markets. HIVE owns state-of-the-art green energy-powered data centre facilities in Canada, Sweden, and Iceland which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud. Our deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto-coins.
For more information and to register to HIVE's mailing list, please visit www.HIVEblockchain.com. Follow @HIVEblockchain on Twitter and subscribe to HIVE's YouTube channel.
On Behalf of HIVE Blockchain Technologies Ltd.
"Frank Holmes"
Interim Executive Chairman
For further information please contact:
Frank Holmes
Tel: (604) 664-1078