Bitfarms Ltd. (“
Bitfarms”, or the
“
Company”) (TSXV: BITF/OTC: BFARF) today announced
its financial results for the first quarter ended March 31, 2021.
All financial references are denominated in US dollars, unless
otherwise noted.
Q1 2021 Key Events
- In January and February 2021, the
Company closed 3 private placements with US institutional investors
for combined gross proceeds of CAD$80 million. The net proceeds
provided the Company the financial leverage to expedite its
infrastructure expansion plans, make deposits for miners and
provide working capital flexibility;
- On March 2nd, 2021, the Company
placed its biggest order of mining rigs in its history; 48,000 best
in class miners with MicroBT. Deliveries are anticipated to start
in January 2022. When all miners are received and installed by the
end of 2022, the Company anticipates its hash rate to reach 8
EH/s;
- On March 24th, Bitfarms’ installed
hashrate hit 1.2 EH/s, in line with expectations for the end of the
quarter
Q1 2021 Financial Results and
Operational Highlights
- Revenues of $28.4 million, gross
profit of $19.3 million (68% gross margin), operating income of
$16.4 million (58% operating margin), and net loss of $7.6
million;
- Gross mining profit1 of $22.3
million (80% gross mining margin1);
- Adjusted EBITDA1 of $19.7 million
(69% adjusted EBITDA margin1);
- Negative EBITDA1 of $3.0 million
(-11% EBITDA margin1), due mainly to non-recurring, non-cash
financial expenses;
- Mined 598 Bitcoins with an average
cost of approximately $8,400 per Bitcoin2, and retained 548 Bitcoin
worth approximately $32.4 million as of March 31, 2021;
- 4,500 miners were received and
installed during the quarter adding approximately 369 PH/s
“As anticipated, increases in our hash rate and
Bitcoin price significantly, and positively, impacted most of our
Q1 2021 key financial metrics. Operationally, we added 4,500
miners, thus reaching 1.2 EH/s in computing power as of the end of
the first quarter 2021. Financially, equity raises totalling CAD$80
million provided us the leverage to begin our infrastructure
buildout for an additional 80MW of power in Quebec, fully repay our
Dominion Capital loan, implement a BTC retention program and place
orders for 48,000 miners anticipated for delivery starting in 2022.
Since the end of the first quarter, we have continued to add to our
BTC inventory which now stands at approximately 1,000 Bitcoin,
valued at approximately $40 million,” commented Mauro Ferrara,
Interim Chief Financial Officer and Corporate Secretary.
Emiliano Grodzki, Chief Executive Officer of
Bitfarms added, “In addition to reporting an outstanding
operational and financial first quarter, we are proud to have been
approved for listing on the Nasdaq Global Market tier and await
final clearance to begin trading. Having its shares trading on the
Nasdaq will provide Bitfarms exposure to new capital markets and a
broader investing community. As well, on May 20th, we closed our
fourth private placement, this time for a sum of CAD$75 million,
thus providing us with additional liquidity to continue marching
towards our 3 EH/s target for the end of 2021, and our 8 EH/s
target by the end of 2022. With our expansion plans firmly in place
and in motion for the year, we are very excited about our future
prospects.”
Financial Results for the Quarter ended
March 31, 2021
In Q1 2021, the Corporation generated revenues
of $28.4 million, up $19.2 million, or 209%, compared to the same
period in 2020, driven by organic growth, as we increased our
average hash rate by approximately 39%, and a significant increase
in Bitcoin price. The average Bitcoin price for the quarter stood
at approximately $45,000 compared to approximately $8,300 for the
same period in 2020.
Q1 2021 gross mining profit and gross mining
margin stood at $22.3 million and 80%, respectively, compared to
$4.1 million and 47% in Q1 2020. The increase in both metrics was
mainly attributable to the same factors as the increase in
revenues.
Our average cost of production per Bitcoin stood
at approximately $8,400 for the quarter, driven by our operating
efficiencies and competitive hydro electricity rates.
For the quarter, adjusted EBITDA and adjusted
EBITDA margin stood at $19.7 million and 69%, respectively,
compared to $2.8 million and 30% in Q1 2020. The increases in
adjusted EBITDA and adjusted EBITDA margin were mainly attributable
to the same factors as for the increases in gross mining profit and
gross mining margin.
The Company’s Q1 2021 EBITDA was negative $3.0
million, resulting in an EBITDA margin of negative 11% compared to
an EBITDA of $1.8 million and EBITDA margin of 20% in Q1 2020. The
EBITDA metric in Q1 2021 was negatively impacted by the non-cash
nature of both warrants related expenses, and debt retirement
embedded derivative related expenses, totaling approximately $22.8
million for the quarter.
Looking at our cashflows, the January and
February private placement equity raises with US institutional
investors totaling CAD$80 million allowed us to institute several
transformative changes to our Company. With the funds raised, we
retired all our Dominion Capital outstanding debt, we started
executing on our infrastructure plans at a number of locations,
both in Quebec and in South America, we put into motion a Bitcoin
retention program, and we placed orders for 48,000 miners for
delivery starting in 2022.
The Company ended the quarter with approximately
$53.0 million in cash and total liquidity, defined as cash and
bitcoin holdings, of approximately $85.5 million.
Conference Call to be held Wednesday,
May 26, 2021 at 5:30pm ET
Management will host a conference call on
Wednesday, May 26, 2021 at 5:30 p.m. ET to review financial
results. Following management’s formal remarks there will be a
question-and-answer session where management will address
pre-submitted questions.
Participants are asked to pre-register for the
call through the following link:
https://dpregister.com/sreg/10156341/e85e3388ed
Please note that registered participants will
receive their dial in number upon registration and will dial
directly into the call without delay. Those without internet access
or unable to pre- register may dial in by calling: 1-866-777-2509
(domestic), 1-412-317-5413 (international). All callers should dial
in approximately 10 minutes prior to the scheduled start time and
ask to be joined into the Bitfarms call.
The conference call will also be available
through a live webcast found here:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=PgMEVu3T
A webcast replay of the call will be available
approximately one hour after the end of the call through August 26,
2021 at the above webcast link. A telephonic replay of the call
will be available through June 2, 2021 and may be accessed by
calling 1-877-344-7529 (domestic) or 1-412-317- 0088
(international) or Canada (toll free) 855-669-9658 and using access
code 10156341.
A presentation of the Q1 2021 results will be
accessible on Wednesday, May 26, 2021, after market close, under
the “Investors” section of the Bitfarms’ website.
About Bitfarms Ltd.
Founded in 2017, Bitfarms is a Bitcoin mining
company, running vertically integrated mining operations with
onsite technical repair, proprietary data analytics and
Company-owned electrical engineering and installation services to
deliver high operational performance and uptime.
Having demonstrated rapid growth and stellar
operations, Bitfarms became the first Bitcoin mining company to
complete its long form prospectus with the Ontario Securities
Commission and started trading on the TSX-V in July 2019. On
February 24, 2021 Bitfarms was honoured to be announced as a Rising
Star by the TSX-V.
Bitfarms has a diversified production platform
with five industrial scale facilities located in Québec. Each
facility is 100% powered with environmentally friendly hydro power
and secured with long-term power contracts. Bitfarms is currently
the only publicly traded pure-play mining company audited by a Big
Four audit firm.
To learn more about Bitfarms’ events,
developments, and online communities:
Website: www.bitfarms.com
https://www.facebook.com/bitfarms/https://twitter.com/Bitfarms_iohttps://www.instagram.com/bitfarms/https://www.linkedin.com/company/bitfarms/
Defined Terms
PH/s: Petahash per second.EH/s: Exahash per
second.
Cautionary Statement
Trading in the securities of the Company should
be considered highly speculative. No stock exchange, securities
commission or other regulatory authority has approved or
disapproved the information contained herein. Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains certain
“forward-looking information” and “forward-looking statements”
(collectively, “forward-looking information”) that are based on
expectations, estimates and projections as at the date of this news
release. The information in this release regarding expectations in
respect to listing and trading on the Nasdaq and about future plans
and objectives of the Company are forward-looking information.
Other forward-looking information includes, but is not limited to,
information concerning: the intentions, plans and future actions of
the Company, as well as Bitfarms’ ability to successfully mine
digital currency, revenue increasing as currently anticipated, the
ability to profitably liquidate current and future digital currency
inventory, volatility of network difficulty and digital currency
prices and the potential resulting significant negative impact on
the Company’s operations, the construction and operation of
expanded blockchain infrastructure as currently planned, and the
regulatory environment for cryptocurrency in the applicable
jurisdictions.
Any statements that involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”,
“plans”, “budget”, “scheduled”, “forecasts”, “estimates”,
“believes” or “intends” or variations of such words and phrases or
stating that certain actions, events or results “may” or “could”,
“would”, “might” or “will” be taken to occur or be achieved) are
not statements of historical fact and may be forward-looking
information and are intended to identify forward- looking
information.
This forward-looking information is based on
assumptions and estimates of management of the Company at the time
they were made, and involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance,
or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Such factors include, among
others, risks relating to: the global economic climate; dilution;
the Company’s limited operating history; future capital needs and
uncertainty of additional financing; the competitive nature of the
industry; currency exchange risks; the need for the Company to
manage its planned growth and expansion; the effects of product
development and need for continued technology change; protection of
proprietary rights; the effect of government regulation and
compliance on the Company and the industry; network security risks;
the ability of the Company to maintain properly working systems;
reliance on key personnel; global economic and financial market
deterioration impeding access to capital or increasing the cost of
capital; and volatile securities markets impacting security pricing
unrelated to operating performance. In addition, particular factors
that could impact future results of the business of Bitfarms
include, but are not limited to: the construction and operation of
blockchain infrastructure may not occur as currently planned, or at
all; expansion may not materialize as currently anticipated, or at
all; the digital currency market; the ability to successfully mine
digital currency; revenue may not increase as currently
anticipated, or at all; it may not be possible to profitably
liquidate the current digital currency inventory, or at all; a
decline in digital currency prices may have a significant negative
impact on operations; an increase in network difficulty may have a
significant negative impact on operations; the volatility of
digital currency prices; the anticipated growth and sustainability
of hydroelectricity for the purposes of cryptocurrency mining in
the applicable jurisdictions, the ability to complete current and
future financings, any regulations or laws that will prevent
Bitfarms from operating its business; historical prices of digital
currencies and the ability to mine digital currencies that will be
consistent with historical prices; an inability to predict and
counteract the effects of COVID-19 on the business of the Company,
including but not limited to the effects of COVID-19 on the price
of digital currencies, capital market conditions, restriction on
labor and international travel and supply chains; and, the adoption
or expansion of any regulation or law that will prevent Bitfarms
from operating its business, or make it more costly to do so. For
further information concerning these and other risks and
uncertainties, refer to the Company’s filings on
www.SEDAR.com including the annual information form for the
year ended December 31, 2020, filed on April 7, 2021. The Company
has also assumed that no significant events occur outside of
Bitfarms’ normal course of business. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those expressed in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on any forward-looking information. The
Company undertakes no obligation to revise or update any
forward-looking information other than as required by law.
|
|
Investor and Media
Contact: |
Investor Relations
Contact: |
Mauro Ferrara |
CORE IR |
Interim Chief Financial
Officer and Corporate Secretary |
investors@bitfarms.com |
Bitfarms Ltd. |
+1.516.222-2560 |
+1.514.691-6228 |
|
MFerrara@bitfarms.com |
|
|
|
Bitfarms Ltd. Consolidated Results of
Operations (Unaudited)
(U.S.$ in thousands except where indicated) |
Three months ended |
|
|
|
|
|
|
For the periods ended as indicated |
March 31, 2021 |
March 31,2020 |
$ Change |
% Change |
Revenues |
28,432 |
|
9,212 |
|
19,220 |
|
209% |
|
Cost of sales |
9,120 |
|
7,917 |
|
1,203 |
|
15% |
|
Gross profit |
19,312 |
|
1,295 |
|
18,017 |
|
1391% |
|
Gross margin |
68% |
|
14% |
|
- |
|
- |
|
General and administrative expenses |
2,819 |
|
2,805 |
|
14 |
|
- |
|
Loss on disposition of digital assets |
22 |
|
- |
|
22 |
|
- |
|
Operating income (loss) |
16,471 |
|
(1,510) |
|
17,981 |
|
1191% |
|
Operating margin |
58% |
|
(16%) |
|
- |
|
- |
|
Gain on disposition of PP&E |
(19) |
|
- |
|
(19) |
|
- |
|
Net financial expenses |
23,425 |
|
1,022 |
|
22,403 |
|
2192% |
|
Net loss before income taxes |
(6,935) |
|
(2,532) |
|
(4,403) |
|
(174%) |
|
Income tax expense (recovery) |
670 |
|
(108) |
|
778 |
|
720% |
|
Net loss |
(7,605) |
|
(2,424) |
|
(5,181) |
|
(214%) |
|
Basic and diluted net loss per share |
(0.06) |
|
(0.03) |
|
- |
|
- |
|
Revaluation gain on digital assets (net of tax) |
5,128 |
|
- |
|
5,128 |
|
- |
|
Total comprehensive loss |
(2,477) |
|
(2,424) |
|
(53) |
|
(2%) |
|
Gross mining profit (1) |
22,267 |
|
4,139 |
|
18,128 |
|
438% |
|
Gross mining margin (1) |
80% |
|
47% |
|
- |
|
- |
|
EBITDA (1) |
(3,029) |
|
1,833 |
|
(4,862) |
|
(265%) |
|
EBITDA margin (1) |
(11%) |
|
20% |
|
- |
|
- |
|
Adjusted EBITDA (1) |
19,701 |
|
2,780 |
|
16,921 |
|
609% |
|
Adjusted EBITDA margin (1) |
69% |
|
30% |
|
- |
|
- |
|
(1) Gross mining profit, Gross mining margin,
EBITDA, EBITDA margin, Adjusted EBITDA, and Adjusted EBITDA margin,
are non-IFRS performance measures; please refer to the Caution
Regarding Non-IFRS Financial Performance Measures section of
Bitfarms’ Q1 2021 Management Discussion and Analysis (MD&A).(2)
Represents the average cost of Bitcoin based on variable cost of
electricity and is calculated by taking the total electricity costs
related to the Mining of Bitcoin, excluding electricity consumed by
hosting clients, divided by the total number of Bitcoin mined.
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