ZUG, Switzerland and
VANCOUVER, Oct. 8, 2019 /CNW/ - HIVE Blockchain Technologies
Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or "HIVE") announces
its results for the first quarter ended June
30, 2019 (all amounts in US dollars, unless otherwise
indicated).
"I am pleased to report a healthy first quarter of positive net
income and positive cash flow," said Frank
Holmes, Interim Executive Chairman of HIVE. "The financial
results reflect our relentless efforts to restructure the Company
to ensure transparency and accountability and to strengthen our
operational control of HIVE and improve our operational efficiency.
These improvements along with a record quarter of mining Bitcoin
enabled us to navigate successfully the significant year-over-year
decline in the price of Ethereum. The Company ended the first
quarter on solid financial footing with nearly $22 million of current assets, including nearly
$8 million of cash."
"Despite positive financial results, 2019 has been a challenging
year for HIVE as we were forced to defend against a proxy battle,"
added Mr. Holmes. "However, we prevailed and the Company is
benefitting from improved transparency, including new direct
contracts with local suppliers rather than through our service
provider,and financial controls. We expect further continued
improvements throughout the fiscal year.
"Our Swedish facility was shut down through much of the first
half of the calendar year, a period of low Ethereum prices. We
successfully rebooted the facility in July and are already seeing
improvements in efficiency from our new strategic partnership with
Blockbase Group announced in August, with transition anticipated to
be complete in the near future."
"Blockchain technology and cryptocurrencies continue to evolve,"
noted Mr. Holmes. "I am proud of the progress that we have made as
industry leaders. We remain at the forefront of an emerging
industry and our financial results speak to the operational
improvements that we have made at the Company. With an improved
cost structure and stabilization of the asset class, I remain
confident that HIVE is very well positioned to benefit from
positive momentum in the blockchain ecosystem.
"We are hopeful these operational improvements will ultimately
be reflected in our share price," concluded Mr. Holmes. "For most
of our history as a public company, there has been a significant
correlation between cryptocurrency prices and HIVE's share price as
investors have used us as proxy for cryptocurrencies.
Unfortunately, that correlation was impacted negatively following
the proxy battle in the spring. This was amplified recently by
large selling volume by a large blockchain industry ETF. This ETF
uses rules-based investing and had to divest its shares in HIVE due
to portfolio rules requiring issuers to have a market
capitalization above $100 million.
However, these shares have now been absorbed by new buyers. The ETF
will able to reacquire their position, as they have with other
companies, when our market cap rises back above $100 million."
Q1 2020 Highlights
- Generated income of $9.1 million,
with a gross mining margin of $3.6
million from mining of digital currencies;
- Mined 1,331 newly minted Bitcoin during the period
- Mined approximately 35,000 Ethereum Classic and over 3,200
newly minted Ethereum during the period
- Earned net income of $5.6 million
for the period.
Financial Review
For the quarter ended June 30,
2019, HIVE's gross mining margin was 39%. First quarter
income from digital currency mining was produced from an average of
3.8 MW of GPU production capacity, and 300 PH of Cloud Mining
capacity, as at June 30, 2019. Below
is an analysis of the Company's income and gross mining margin:
|
Three months ended
June 30,
|
|
2019
|
2018
|
Income from
digital currency mining
|
$
|
9,123,630
|
$
|
10,660,664
|
Operating and
maintenance costs of digital currency mining
|
(5,554,975)
|
(4,219,483)
|
Gross Mining
Margin1
|
3,568,655
|
6,441,181
|
Gross Mining
Margin %1
|
39%
|
60%
|
|
|
|
Depreciation
|
(1,252,957)
|
(4,684,456)
|
Gross
Profit
|
2,315,698
|
1,756,725
|
|
|
|
Revaluation of
digital currencies2
|
2,893,831
|
(1,336,918)
|
Gain on sale of
digital currencies
|
743,125
|
61,672
|
|
|
|
General and
administrative expenses
|
(1,299,115)
|
(1,539,540)
|
Foreign
Exchange
|
(1,110,419)
|
(1,477,583)
|
Share-based
compensation
|
(293,880)
|
(98,001)
|
|
|
|
Unrealized gain on
investments
|
2,359,508
|
-
|
Finance
expense
|
(53,965)
|
(38,794)
|
|
|
|
Tax expense
(recovery)
|
-
|
(50,000)
|
Gain (loss) from
continuing operations
|
$
|
5,554,783
|
$
|
(2,722,439)
|
|
|
|
EBITDA3
|
$
|
4,502,197
|
$
|
2,050,811
|
Adjusted
EBITDA3
|
$
|
1,902,246
|
$
|
3,485,730
|
|
|
|
Diluted income
(loss) per share
|
$
|
0.02
|
$
|
(0.01)
|
|
|
|
Net cash inflows
(outflows) from operating activities
|
$
|
844,340
|
$
|
8,277,266
|
Net cash inflows
(outflows) from investing activities
|
$
|
-
|
$
|
(7,305,432)
|
Net cash inflows
(outflows) from financing activities
|
$
|
272,328
|
$
|
214,040
|
|
|
|
As at
|
June 30,
2019
|
March 31,
2019
|
Total
assets
|
$
|
33,170,539
|
$
|
27,761,197
|
Total non-current
liabilities
|
$
|
356,089
|
$
|
-
|
|
|
|
(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 Condensed Interim Consolidated Financial
Statements and Management's Discussion and Analysis (MD&A)
thereon for the three months ended June 30,
2019 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 Wednesday, October 9, 2019 at 8:30am Eastern Time to discuss the financial
results for the three months ended June 30,
2019. Presenting on the webcast will be Frank Holmes, Interim Executive Chairman and
Darcy Daubaras, Chief Financial
Officer. Webcast details will be provided in a separate news
release.
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 quarter ended
June 30, 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.
SOURCE HIVE Blockchain Technologies Ltd.