Argo Blockchain falls to £194m full-year loss as bitcoin price falls

Argo Blockchain slumped to a heavy loss last year amid a fall in the price of bitcoin and higher costs, despite a surge in the number of the digital coins mined.

The London-listed bitcoin miner reported a net loss of £194million for 2022, compared to net income of £30.8million in 2021, as revenues fell 36 per cent to £47.4million.

Margins dropped to 54 per cent, from 84 per cent a year earlier, squeezed by a fall in the price of bitcoin, which lost over 60 per cent of its value last year, as well as higher-than-expected power costs at its mining facility in Texas.

Argo’s CEO said the company is now ‘stronger and in a much more solid financial position’ 

That’s despite the company mining a total of 2,156 bitcoins, an increase of 5 per cent compared to 2021. 

Argo has also mined 8 per cent fewer bitcoins year-on-yea in the first quarter of 2023, which it blamed on an ‘increase in the network difficulty’.

However, margins increased to around 45 to 50 per cent, from 35 per cent in the final 2022 quarter, thanks to rebound in the price of bitcoin since the start of the year and falling electricity prices.

Bitcoin price has surged more than 70 per cent since the start of 2023, with the world’s biggest and most well-known crypto valued at $29,350 today, having topped $30,000 earlier this month for the first time since June.

However, it has halved in value since soaring above $60,000 in November 2021, and closed 2022 down by around 64 per cent.

Falling cryptocurrency values have hit bitcoin miners hard, with some companies, including Core Scientific and Celsius Mining, filing for bankruptcy.

Rebound: Bitcoin price has surged more than 70% since the start of 2023

In December, Argo Blockchain also warned it may go bankrupt, but then saved itself by selling its crypto mining facility, Helios, for £54million to Galaxy Digital.

Argo said it will now focus on its operations in Quebec, Canada, where it operates two sites that support 200 megawatts of electricity.

It expects the delivery of 2,870 new ‘BlockMiner’ machines over the summer, which are expected to boost efficiency at the sites. 

Interim chief executive, Seif El-Bakly, said: ‘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.

‘Following the build of Helios and the strategic transaction with Galaxy, we have streamlined our operations to maximize efficiency and increase our hashrate while maintaining our mining capacity thanks to our Hosting Agreement. 

‘On the basis of these foundations, we continue to work diligently on the next stage of Argo’s growth and development, with the goal of delivering long-term value to our shareholders.’

Argo Blockchain shares were down almost 5 per cent to 12p in afternoon trading on Friday, having lost more than 80 per cent of their value over the last year.

This post first appeared on Dailymail.co.uk