ZUG, Switzerland and
VANCOUVER, Sept. 30, 2019 /CNW/ - HIVE Blockchain
Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or
"HIVE") announces its results for the fourth quarter and full year
ended March 31, 2019 (all amounts in
US dollars, unless otherwise indicated).
"Over the past year, HIVE has undergone significant changes
which have improved transparency and accountability from strategic
partners which will allow us to better manage our business," said
Frank Holmes, Interim Executive
Chairman of HIVE. "We weathered a challenging period for
cryptocurrency and blockchain companies as the value of Bitcoin and
Ethereum underwent tremendous erosion of value causing a massive
fall in the cost of computing equipment. However, we
opportunistically added Bitcoin capacity at attractive financial
terms."
"Since becoming interim CEO and adding a full-time CFO, we have
restructured the company to strengthen our operational control of
HIVE and improved our cost structure," said Frank. "There is more
to be done but I am certain that the work done during the fiscal
year and throughout 2019 has better positioned the Company for
growth."
"We are pleased by the financial results from our 300 Petahashes
of Bitcoin mining capacity and the progress we have seen in our
Ethereum mining following the restart of Sweden with Blockbase, our new operational
partner, subsequent to the end of the 2019 fiscal year." added Mr.
Holmes.
"Our financial performance reflects the benefits of scale as we
generated significant growth in revenue during fiscal 2019 against
fiscal 2018," added Frank Holmes.
"We made the prudent decision to write-down certain assets in
fiscal 2019, a non-cash impairment charge that reflects dramatic
industry changes and volatility of cryptocurrencies since we went
public in 2017. The cost of new GPU chips declined dramatically in
fiscal 2019 against the backdrop of Ethereum prices falling from
more than $1,400 at the start of 2018
to less than $100 at the end of that
year while Bitcoin fell from more than $14,000 to under $4,000 in the same timeframe."
"These were unprecedented drops in currency and the capital
equipment that I have not seen in my 40 years as an investor,"
noted Frank Holmes. "I want to
stress that these impairments are non-cash charges, no cash went
out the door, it is strictly an accounting treatment. That said,
HIVE also benefited from the trend as we were able to scale our
mining operations at lower than historical costs and we are
realizing the benefits as Bitcoin prices have increased from
$3,826 at the start of 2019 to highs
of nearly $13,000 in June 2019. Similarly, Ethereum started the year
at $130 and exceeded $330 in June
2019."
"Further, we have witnessed important industry milestones as
companies like JP Morgan and Facebook have embraced cryptocurrency
and that adoption by consumers is on the rise," said Frank Holmes. "We continue to believe that we
are in the early innings of the evolution of blockchain and it is
my opinion that HIVE is positioned for growth and as leaders in the
industry. We learned valuable lessons during the crypto bear market
which resulted in us demanding greater transparency and
accountability from our business partners while reducing our
costs."
FY 2019 Highlights
- Generated revenues of $31.8
million, a 143% increase over FY2018, with a gross mining
margin1 of $7.0 million,
from mining of digital currencies;
- Mined over 82,000 newly minted Ethereum during year ended
March 31, 2019, representing an
increase of 329% over prior year production, despite a shutdown of
the facility in Sweden during a
portion of the year;
- And mined 1,751 newly minted Bitcoin during year ended
March 31, 2019. The company did not
mine Bitcoin in the prior year;
- Recognized a non-cash impairment charge of $90.9 million related to our data centre
equipment, SHA-256 ASIC capacity, and land development rights in
Norway;
- Incurred a loss of $137.8 million
for the year;
- Increased its mining capacity over the prior year by 318% by
adding an additional 7 MW of data centre equipment and 300 PH of
SHA-256 ASIC capacity; and
- Diversified its production range with the addition of
cloud-based Bitcoin mining.
Financial Review
For the year ended March 31, 2019,
HIVE's gross mining margin was 22%. Fourth quarter income from
digital currency mining was produced from an average of 14.0 MW of
GPU production capacity, and 300 PH of Cloud Mining capacity, as at
March 31, 2019. Below is an analysis
of the Company's income and gross mining margin:
|
|
|
|
|
|
|
FY
2019
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
|
|
|
|
|
|
Income from digital
currency mining
|
$
|
31,824,443
|
$
|
6,191,017
|
$
|
8,449,545
|
$
|
6,523,217
|
$
|
10,660,664
|
|
|
|
|
|
|
Operating and
maintenance
|
(24,793,774)
|
(5,219,055)
|
(10,694,763)
|
(4,660,473)
|
(4,219,483)
|
Depreciation
|
(29,324,286)
|
(10,104,251)
|
(9,392,790)
|
(5,142,789)
|
(4,684,456)
|
|
(22,293,617)
|
(9,132,289)
|
(11,638,008)
|
(3,280,045)
|
1,756,725
|
|
|
|
|
|
|
Gross mining
margin
|
7,030,669
|
971,962
|
(2,245,218)
|
1,862,744
|
6,441,181
|
Gross mining margin %
(1)
|
22%
|
16%
|
(27%)
|
29%
|
60%
|
Gross margin
%
|
(70%)
|
(148%)
|
(105%)
|
(50%)
|
16%
|
|
|
|
|
|
|
Revaluation (loss)
gain of digital currencies (2)
|
(10,138,348)
|
3,633,660
|
(4,602,879)
|
(7,832,211)
|
(1,336,918)
|
(Loss) gain on sale
of digital currencies
|
(3,421,835)
|
(496,485)
|
(1,825,637)
|
(1,161,385)
|
61,672
|
|
|
|
|
|
|
SBC
|
(1,132,371)
|
(342,422)
|
(531,587)
|
(160,361)
|
(98,001)
|
Impairment
|
(90,927,728)
|
(60,213,523)
|
(15,967,785)
|
(14,746,420)
|
-
|
General
Expenses
|
(8,604,809)
|
(2,633,037)
|
(1,862,968)
|
(1,091,681)
|
(3,017,123)
|
|
|
|
|
|
|
Unrealized loss on
investments
|
(1,327,721)
|
(1,327,721)
|
-
|
-
|
-
|
Finance income
(expense)
|
(182,691)
|
(170,835)
|
4,886
|
22,052
|
(38,794)
|
|
|
|
|
|
|
Tax (expense)
recovery
|
227,000
|
277,000
|
-
|
-
|
(50,000)
|
Loss from continuing
operations
|
$
|
(137,802,120)
|
$
|
(70,405,652)
|
$
|
(36,423,978)
|
$
|
(28,250,051)
|
$
|
(2,722,439)
|
|
|
|
|
|
|
EBITDA (3)
|
$
|
(108,522,143)
|
$
|
(60,407,566)
|
$
|
(27,036,074)
|
$
|
(23,129,314)
|
$
|
2,050,811
|
Adjusted EBITDA
(3)
|
$
|
(6,323,696)
|
$
|
(3,485,281)
|
$
|
(5,933,823)
|
$
|
(390,322)
|
$
|
3,485,730
|
(1)
|
Gross mining margin
equates to income from digital mining less operating and
maintenance costs and is a non-IFRS measure; see Non-IFRS Measures
in MD&A for reconciliation
|
(2)
|
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
|
(3)
|
EBITDA and Adjusted
EBITDA are non-IFRS measures; see Non-IFRS Measures in MD&A for
reconciliation
|
Financial Statements and MD&A
The Company's Financial Statements and Management's Discussion
and Analysis (MD&A) for the three and twelve months ended
March 31, 2019 will be accessible on
SEDAR at www.sedar.com under HIVE's profile and on the Company's
website at www.HIVEblockchain.com.
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
GPU-based digital currency mining facilities in Iceland and Sweden, which produce newly minted digital
currencies like Ethereum continuously as well as cloud-based
ASIC-based capacity which produces newly minted digital currencies
like Bitcoin. Our deployments provide shareholders with exposure to
the operating margins of digital currency mining as well as a
growing 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
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
Forward-Looking Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. "Forward-looking information" in this news release
includes information about the potential for the Company's long
term growth; the business goals and objectives of the Company, and
other forward-looking information includes but is not limited to
information concerning the intentions, plans and future actions of
the parties to the transactions described herein and the terms
thereon.
Factors that could cause actual results to differ materially
from those described in such forward-looking information include,
but are not limited to, the ongoing partnership with Genesis; the
digital currency market; the Company's ability to successfully mine
digital currency; the Company may not be able to profitably
liquidate its current digital currency inventory, or at all; a
decline in digital currency prices may have a significant negative
impact on the Company's operations; the volatility of digital
currency prices; and other related risks as more fully set out in
the Filing Statement of the Company dated and other documents
disclosed under the Company's filings at
www.sedar.com.
This news release also contains "financial outlook" in the
form of gross mining margins, which is intended to provide
additional information only and may not be an appropriate or
accurate prediction of future performance, and should not be used
as such. The gross mining margins disclosed in this news release
are based on the assumptions disclosed in this news release and the
Company's Management Discussion and Analysis for the year ended
March 31, 2019, which assumptions are
based upon management's best estimates but are inherently
speculative and there is no guarantee that such assumptions and
estimates will prove to be correct.
The forward-looking information in this news release reflects
the current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about the Company's
ability to profitably liquidate its digital currency inventory as
required; the Company's ongoing partnership with Genesis and new
partnership with Blockbase; historical prices of digital currencies
and the ability of the Company to mine digital currencies will be
consistent with historical prices; and there will be no regulation
or law that will prevent the Company from operating its business.
The Company has also assumed that no significant events occur
outside of the Company's normal course of business. Although the
Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainty therein.
_________________________
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1 Gross mining margin is a non-IFRS
measure; see Non-IFRS Measures in MD&A for
reconciliation
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SOURCE HIVE Blockchain Technologies Ltd.