Argo Blockchain Slumps to Full-Year Loss on Bitcoin Price Slide

The crypto mining company is in a stronger position now, interim CEO El-Bakly said.

AccessTimeIconApr 28, 2023 at 8:18 a.m. UTC
Updated May 9, 2023 at 4:13 a.m. UTC

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

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

Miners across the board struggled in 2022 as revenue declined alongside the bitcoin price while energy costs soared and the difficulty of mining a bitcoin block, which is when they are rewarded, soared. While rivals such as Core Scientific and Compute North filed for bankruptcy protection, Argo avoided the same fate by agreeing to sell its 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 its mining equipment.

Argo's mining margin widened 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.

"Having navigated 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 didn't have a fixed-rate power agreement, which meant costs rose sharply amid the 2022 energy crisis. Argo tried to raise funds to avoid bankruptcy, then eventually decided to sell the site, which has the potential of reaching 800 MW of power consumption.

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

Argo is one of a handful of companies that agreed to buy chipmaking giant Intel's (INTC) bitcoin mining application-specific integrated circuits (ASIC) in February 2022. It is designed a mining rig using those chips along with hardware maker ePIC Blockchain. Intel last week said it is discontinuing the product line while ePIC Blockchain is promoting the Intel-based machines on its website to other customers.

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

Shares of the company fell 5% as of mid-morning on the London Stock Exchange.

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

Edited by Sheldon Reback.


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Eliza Gkritsi

Eliza Gkritsi was CoinDesk's AI/crypto reporter.

Sheldon Reback

Sheldon Reback is a CoinDesk news editor based in London. He owns a small amount of ether.

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