TORONTO, Aug. 12, 2021 /CNW/ - Hut 8 Mining Corp. (Nasdaq:
HUT) (TSX: HUT) ("Hut 8" or the "Company"), one of North America's largest, innovation-focused
digital asset mining pioneers, supporting open and decentralized
systems since 2018, is pleased to announce its financial results
for the quarter ending June 30, 2021
("Q2-2021"). All dollar figures are in Canadian Dollars ("CAD"),
unless otherwise stated.
BITCOIN INVENTORY AND VALUE
Hut 8 continues to strategically emphasize its "hodl" strategy,
taking active steps to generate Canadian and US dollars to help
fund operating expenses, so as to avoid selling Bitcoin. During
Q2-2021, 100% of self- mined Bitcoin was deposited into custody. As
of June 30, 2021, the Company had a
total Bitcoin balance of 3,824 with a market value of $166 million. Hut 8's current Bitcoin balance,
including 2,000 Bitcoin loaned as part of the Company's fiat yield
strategy, is approximately 4,240 Bitcoin, reflecting a market value
of approximately $245 million.
HASHRATE AND COMPUTE POWER
Hut 8 currently has an installed hashrate of 1.37 exahash ("E/H"). Given pending orders, we have additional contracted
hashrate of 1.3 E/H (including 1,600 gigahash equivalent), bringing
contracted hashrate to approximately 2.7 E/H.
Based on current network dynamics, we anticipate daily
settlement once all contracted equipment is hashing will
equate to 20 – 25 Bitcoin per day.
Q2-2021 HIGHLIGHTS
- Second consecutive record quarterly revenue, hitting
$33.5 million in Q2-2021, with our
self-mining operations generating $31.4
million of revenue and our expanded hosting service
generating $2.2 million. We mined 553
Bitcoin in Q2-2021, all of which was added to our self-mined
Bitcoin balance.
- Successfully became the first Canadian digital asset miner to
list its common shares on the Nasdaq stock exchange ("Nasdaq").
Further, Hut 8 is the only TSX-listed miner to achieve listing on
The Nasdaq Global Select Market, which has the highest initial
financial and liquidity requirements of any Nasdaq market tier.
This achievement gives the Company access to a substantially
increased pool of investors, both for purposes of future capital
raises and providing improved liquidity to current and future
shareholders.
- Hut 8 closed a public offering on June
15, 2021, raising gross proceeds of $115 million, providing flexibility in the face
of market uncertainty for the Company to continue making strategic
investments, summarized as follows:
-
- Two opportunistic purchases directly from MicroBT of 11,953
M30S, M30S+ and M31S miners, representing compute power of 1.08
E/H;
- Investment in 10,000 high-performance NVIDIA CMPs, which will
initially be deployed to mine the Ethereum network and settle in
Bitcoin. These NVIDIA chips, delivery of which is expected to occur
throughout August and September 2021,
will consume only 3.5 – 4.0 MW of power, while operating at
approximately 1,600 gigahash. We anticipate settlement in Bitcoin
will result in 2.0 – 3.0 Bitcoin per day;
- Investment into the power purchase agreement ("PPA") and new
power facility with Validus Power Corp. The initial phase of this
facility is currently expected to be operational late in the fourth
quarter of 2021 and will substantially increase Hut 8's power
capacity on a physical off-take basis at a compelling power rate of
$0.0274/kWh, subject to an annual
adjustment mechanism, for the five-year term of the PPA.
- Launched several ESG-related initiatives, including
establishing a robust recycling program to limit waste volumes sent
to landfill, installation of low-emission LED lighting throughout
all facilities and electrification of our fleet of on-site
vehicles.
"It is gratifying to see the core strengths of Hut 8, namely our
people and operational excellence, combine to advance our
commitment to building a diversified leader in the digital asset
infrastructure space," commented Shane
Downey, Chief Financial Officer of the Company. "Hut
8's disciplined approach to managing our balance sheet, while
prioritizing the efficient accumulation of Bitcoin, served us well
in Q2- 2021, and that as we continue to focus on execution, we
are well-positioned heading into the back half
of 2021 and into 2022."
OPERATING AND FINANCIAL OVERVIEW
For the periods ended June 30
|
Three Months Ended
|
Six Months Ended
|
(CAD thousands, except per share amounts)
|
2021
|
2020
|
2021
|
2020
|
Operating results
|
|
|
|
|
Digital assets mined
|
553
|
795
|
1,092
|
1,910
|
Financial results
|
|
|
|
|
Total revenue
|
$
|
33,549
|
$
|
9,230
|
$
|
65,532
|
$
|
21,970
|
Net income
|
(20,430)
|
2,840
|
15,094
|
(7,390)
|
Mining profit (i)
|
19,144
|
697
|
37,086
|
995
|
Adjusted EBITDA (i)
|
14,356
|
65
|
30,608
|
(322)
|
Per share
|
|
|
|
|
Net income - basic
|
$
|
(0.17)
|
$
|
0.03
|
$
|
0.13
|
$
|
(0.08)
|
Net income - diluted
|
$
|
(0.16)
|
$
|
0.03
|
$
|
0.12
|
$
|
(0.08)
|
(i) Non-IFRS
measure - see "Non-IFRS Measures" section below . Certain
comparative figures have been restated w here necessary to conform
with current period presentation.
|
|
|
As At
|
(CAD thousands)
|
June 30, 2021
|
December 31, 2020
|
Financial position
|
|
|
Cash
|
$
92,681
|
$
2,816
|
Total digital assets
|
166,081
|
101,962
|
Total
assets
|
362,658
|
145,202
|
Total liabilities
|
14,317
|
29,647
|
Total shareholder's equity
|
348,341
|
115,555
|
Working Capital (i)
|
251,111
|
75,673
|
(ii)
Calculated as current assets less current liabilities.
|
- Revenue for Q2-2021 of $33.5
million, was up significantly versus $9.2 million in the prior year period. This
result stems from 553 self-mined Bitcoin generating $31.4 million of revenue, compared to 795 Bitcoin
and $9.2 million revenue from mining
in the prior year period. We also generated $2.2 million of revenue from hosting services,
versus $nil in the prior year period, reflecting two hosting
customers, the second of which was on-boarded in late May 2021.
- Site operating costs for Q2-2021 were $13.8 million, up from the prior year period of
$9.2 million, related principally to
increased power consumption, driven by a substantial increase in
average hashrate as well as Alberta power prices.
- Net loss in Q2-2021 was $20.4
million, versus net income of $2.8
million in Q2-2020, with the difference stemming primarily
from unrealized revaluation adjustment related to a change in loan
receivable classification.
- Adjusted EBITDA (a "Non-IFRS Measure", please refer below) in
Q2-2021 was $14.4 million, versus
$0.1 million in the prior year
period, driven by the expansion of Hut 8's operations and the
improvement in Bitcoin mining economics.
- Digital assets consist of Bitcoin, which had a self-mined
balance of 3,824 Bitcoin and a market value of $166 million as of June
30, 2021. This balance consisted of 1,824 Bitcoin held in
custody and 2,000 held under lending arrangements.
FORWARD-LOOKING INFORMATION
This press release includes "forward-looking information" and
"forward-looking statements" within the meaning of Canadian
securities laws and United States
securities laws, respectively (collectively, "forward- looking
information"). All information, other than statements of historical
facts, included in this press release that address activities,
events or developments that the Company expects or anticipates will
or may occur in the future, including such things as future
business strategy, competitive strengths, goals, expansion and
growth of the Company's businesses, operations, plans and other
such matters is forward-looking information. Forward-looking
information is often identified by the words "may", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions and
includes, among others, statements regarding the anticipated
expansion of the current installed hashrate, the Company's
trajectory to produce additional Bitcoin, planned investments for
the balance of 2021 geopolitical impacts and the build-out of a new
power facility.
Forward looking information is necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by Hut 8 as of the date of this press release, are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to the factors described in greater detail in the
"Risk Factors" section of the Company's Annual Information Form
dated March 25, 2021, which is
available on www.sedar.com. These factors are not intended to
represent a complete list of the factors that could affect Hut 8;
however, these factors should be considered carefully. There can be
no assurance that such estimates and assumptions will prove to be
correct. The forward-looking statements contained in this press
release are made as of the date of this press release, and Hut 8
expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or
assumptions underlying them, whether as a result of new
information, future events or otherwise, except as required by
law.
Neither the Toronto Stock Exchange nor its Regulation Services
Provider (as that term is defined in
the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
NON-IFRS MEASURES
This press release makes reference to certain measures that are
not recognized under IFRS and do not have a standardized meaning
prescribed by IFRS. They are therefore not necessarily comparable
to similar measures presented by other companies. The Company uses
non-IFRS measures including "Adjusted EBITDA" and "Mining Profit"
as additional information to complement IFRS measures by providing
further understanding of the Company's results of operations from
Management's perspective.
"Adjusted EBITDA" represents EBITDA (net income or loss
excluding net finance income or expense, income tax or recovery,
depreciation, and amortization) adjusted to exclude non-cash
share-based compensation, fair value gain or loss on revaluation of
digital assets, non-recurring impairment charges or reversals of
impairment, and costs associated with one-time or non-recurring
transactions. Adjusted EBITDA is used to assess profitability
without the impact of non-cash accounting policies, capital
structure, taxation, and one-time or non-recurring transactions.
This performance measure provides a consistent comparable metric
for profitability of the Company across time periods.
"Mining profit" represents gross profit (revenue less cost of
revenue), excluding depreciation and revenue and site operating
costs directly attributable to hosting. Mining profit show
profitability of the Company's core digital asset mining operation,
without the impact of non-cash depreciation expense.
The following table reconciles
net income (loss) to our non-IFRS
measure, Adjusted EBITDA:
For the periods ended June 30
|
Three Months Ended
|
Six Months Ended
|
(CAD thousands)
|
2021
|
2020
|
2021
|
2020
|
Net income (loss)
|
$
|
(20,430)
|
$
|
2,840
|
$
|
15,094
|
$
|
(7,390)
|
Add (deduct):
Net finance costs
|
(639)
|
693
|
(987)
|
1,342
|
Depreciation and amortization
|
2,977
|
6,958
|
8,780
|
13,967
|
Share based payment
|
1,768
|
60
|
4,524
|
(648)
|
Revaluation of digital assets
|
-
|
(9,418)
|
-
|
(8,136)
|
Gain on used of digital assets
|
-
|
(689)
|
(182)
|
(1,603)
|
Foreign exchange
|
212
|
(1,073)
|
643
|
1,281
|
Unrealized revaluation
related to loan
receivable classification change
|
22,935
|
-
|
-
|
-
|
Share
based payment taxes w itholding
|
-
|
-
|
1,246
|
-
|
Sales tax expense
|
1,018
|
152
|
1,801
|
323
|
One-time transaction costs
|
468
|
542
|
468
|
542
|
Deferred income tax recovery
|
6,046
|
-
|
(780)
|
-
|
Adjusted EBITDA
|
$
|
14,356
|
$
|
65
|
$
|
30,608
|
$
|
(322)
|
The following table reconciles gross profit to our non-IFRS measure, Mining profit:
For the periods ended June 30
|
Three Months Ended
|
|
Six Months Ended
|
(CAD thousands)
|
2021
|
2020
|
|
2021
|
2020
|
Gross profit (loss)
|
$
|
16,795
|
$
|
(6,261)
|
|
$
|
29,124
|
$
|
(12,972)
|
|
|
|
|
|
|
|
|
|
|
Add (deduct):
Revenue from hosting
|
(2,193)
|
-
|
|
(3,618)
|
-
|
Site operating costs
attributable to hosting
|
1,565
|
-
|
|
2,801
|
-
|
Depreciation and amortization
|
2,977
|
6,958
|
|
8,780
|
13,967
|
Mining profit
|
$
|
19,144
|
$
|
697
|
|
$
|
37,086
|
$
|
995
|
ABOUT HUT 8
Hut 8 is a digital asset mining company with industrial-scale
operations in Alberta, Canada. The
Company is one of North America's
largest innovation-focused digital asset miners, supporting open
and decentralized systems since 2018. Located in energy rich
Alberta, Canada, Hut 8 has one of
the highest installed capacity rates in the industry and holds more
self-mined Bitcoin than any publicly traded company globally. Hut 8
is executing on its strategy of mining and holding Bitcoin, while
building a diversified business and revenue strategy to grow and
protect shareholder value, regardless of Bitcoin price action. The
Company's multi-pronged business strategy includes profitable
digital asset mining, white-label high- performance compute
hosting, as well as yield & income programs leveraging its
Bitcoin held in reserve. Having demonstrated rapid growth and a
stellar balance sheet, Hut 8 was the first publicly traded miner on
the TSX and the first Canadian miner to be listed on The Nasdaq
Global Select Market. Hut 8's team of business building
technologists are believers in decentralized systems, stewards of
powerful industry- leading solutions, and drivers of innovation in
digital asset mining and high-performance computing, with a focus
on Environmental, Social and Governance ("ESG") standards
alignment. Through innovation, imagination, and passion, Hut 8 is
helping to define the digital asset revolution to create value and
positive impacts for its shareholders and generations to come.
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SOURCE Hut 8 Mining Corp