Digihost Reports Positive Third Quarter 2022 Results
November 15 2022 - 6:00AM
Digihost Technology Inc. (“
Digihost” or the
“
Company”) (Nasdaq: DGHI; TSXV: DGHI), an
innovative U.S. based Bitcoin (“
BTC”) mining
company, announces unaudited financial results for the third
quarter ended September 30, 2022 (all amounts in U.S. dollars,
unless otherwise indicated).
Michel Amar, CEO of the Company commented,
“Digihost is pleased to present its third quarter financial
results, highlighted by a 52% increase in Bitcoins mined during Q3
2022 compared to Q3 of 2021. The Company continues to be committed
to conservatively managing its balance sheet and effectively
allocating its capital resources in today’s challenging economic
environment. We are proud to be one of the rare cryptocurrency
mining companies with positive net income and EBITDA* year-to-date.
Digihost also remains debt free, with the exception of
approximately $1 million of mortgage debt secured by our Alabama
facility, providing us the opportunity to make strategic
investments as opportunities arise with the underlying goal of
securing access to clean and renewable energy sources.”
Comparative Financial Highlights for the
Nine Month Period Ended September 30, 2022
- Revenue from digital currency
mining of $18.5 million reported for the nine-month period ended
September 30, 2022, compared to $15.4 million for the nine-month
period ended September 30, 2021, an increase of 20%;
- For the nine-month period ended
September 30, 2022, the Company mined a total of 641.64 BTC
compared to 425.12 BTC for the nine-month period ended September
30, 2021, an increase of 51%;
- Operating income for the nine-month
period ended September 30, 2022 of $12.8 million, compared to $6.8
million for the nine-month period ended September 30, 2021, an
increase of 87%;
- Net income of $14.1 million for the
nine-month period ended September 30, 2022, compared to net income
of $6.5 million over the same period in 2021, an increase of
117%;
- EBITDA* of $19.6 million for the
nine-month period ended September 30, 2022, compared to $9.2
million over the same period in 2021, an increase of 113%;
- Total assets of $61 million as at
September 30, 2022;
- Cash and cash equivalents of $7.4
million as at September 30, 2022;
- Working capital of $8.9 million as
at September 30, 2022;
- Property, plant and equipment of
$43.4 million at the end of Q3, 2022 consisting primarily of the
Company’s BTC miners (51%) and mining infrastructure and land
(49%);
- Raised CAD$13.3 million of
institutional equity financing in a private placement at a premium
to market price; and
- Fully repaid a $10 million BTC
collateralized revolving credit facility.
Q3 Highlights
- The Company mined 202.78 BTC in the
quarter ended September 30, 2022, compared to 133.02 BTC for the
quarter ended September 30, 2021;
- EBITDA* of $2.4 million for the
three-month period ended September 30, 2022, compared to $2.6
million for the quarter ended September 30, 2021.
* EBITDA is a non-IFRS financial measure and
should be read in conjunction with, and should not be viewed as an
alternative to or replacement of, measures of operating results and
liquidity presented in accordance with IFRS and refer readers to
reconciliations of non-IFRS measures included in the Company’s
MD&A.
(U.S.$ except per share data) |
Nine Months Ended |
|
September 302022 |
September 302021 |
Revenue from digital currency mining |
18,507,951 |
|
15,365,382 |
|
Cost of power and production costs |
(7,571,825 |
) |
(5,234,390 |
) |
Miner lease agreement |
(6,876,840 |
) |
- |
|
Depreciation and amortization |
(6,378,709 |
) |
(2,362,810 |
) |
Gross profit (loss) |
(2,319,423 |
) |
7,768,182 |
|
General and administrative and other expenses |
(3,839,210 |
) |
(1,777,045 |
) |
Gain on sale of property, plant and equipment |
2,340,658 |
|
939,516 |
|
Loss on settlement of debt |
- |
|
(278,111 |
) |
Foreign exchange |
4,771,853 |
|
621,889 |
|
Other Income |
167,678 |
|
58,519 |
|
Change in fair value - Miner Lease Agreement |
539,654 |
|
- |
|
Loss on sale of digital currencies |
(11,574,330 |
) |
- |
|
Revaluation of warrant liabilities |
30,229,221 |
|
5,993,792 |
|
Loss on revaluation of digital currencies |
(5,060,188 |
) |
- |
|
Share based compensation |
(2,483,928 |
) |
(6,538,261 |
) |
|
|
|
Operating income |
12,771,985 |
|
6,788,481 |
|
Net financial expenses |
(238,204 |
) |
(273,650 |
) |
Net income before taxes |
12,533,781 |
|
6,514,831 |
|
Deferred tax recovery (expense) |
1,537,467 |
|
(1,498,085 |
) |
Net income for the period |
14,071,248 |
|
5,016,746 |
|
Foreign currency translation adjustment |
(4,432,730 |
) |
(644,436 |
) |
Revaluation of digital currency, net of tax |
(3,706,624 |
) |
1,441,376 |
|
Total comprehensive income for the period |
5,931,894 |
|
5,813,686 |
|
Basic and diluted income per shareWeighted average number of
subordinate voting shares outstanding – diluted |
0.5227,022,331 |
|
0.2420,674,355 |
|
North Tonawanda Power Plant Acquisition
Update
The Company continues to move forward with
closing documentation and approval requirements related to
Digihost’s acquisition of a 60 MW power plant in North Tonawanda,
NY (“NT”). Management anticipates this transaction
will close in Q4 of 2022 providing the Company with additional
computing capacity of approximately 1.04 EH based upon a power
generation run rate of approximately 50 MW from the plant. When
combined with Digihost’s current operations total computing
capacity from the Company’s New York State (“NY”) operations is
projected to be approximately 1.7 EH.
Alabama Site Build-Out
The Alabama Phase 1 build-out is continuing on
schedule and on budget. Phase 1, scheduled for completion in Q4 of
2022, will provide the Company with 22 MW of power capacity
resulting in additional mining capacity of approximately 550 PH.
When combined with the projected mining capacity from the Company’s
NY facilities, Digihost’s total computing power by the end of Q4
could reach approximately 2.25 EH.
Digihost is building the necessary
infrastructure to provide the Alabama property with total power
capacity of 55 MW, with the additional 33 MW (860 PH) projected to
be operational by the end of the first quarter of 2023, resulting
in total projected computing power available to the Company at that
time of approximately 3.1 EH.
At-the-Market Financing
Update
On March 4, 2022, the Company entered into an
offering agreement with H.C. Wainwright & Co., LLC as agent,
pursuant to which the Company established an at-the-market equity
program (the “ATM Program”). During the three months ended
September 30, 2022, the Company issued 2,100 subordinate voting
shares at an average share price of $1.1757, being all of the
securities issued pursuant to the ATM Program from the commencement
of the ATM Program through to the date hereof.
About Digihost
Digihost is a growth-oriented blockchain
technology company primarily focused on BTC mining. Through its
self-mining operations and joint venture agreements, the Company is
currently hashing at a rate of approximately 650 PH.
For further information, please contact:
Digihost Technology
Inc.www.digihost.caMichel Amar, Chief Executive
Officer T: 1-818-280-9758Email: michel@digihost.ca
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
Except for the statements of historical fact,
this news release contains “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 and are covered by
safe harbors under Canadian and United States securities laws.
Forward-looking information in this news release includes
information about potential further improvements to profitability
and efficiency across mining operations including, as a result of
the Company’s expansion efforts, acquisitions of equipment and
infrastructure, potential for the Company’s long-term growth, and
the business goals and objectives of the Company. Factors that
could cause actual results to differ materially from those
described in such forward-looking information include, but are not
limited to: the ability to obtain regulatory approval for and
complete acquisitions of equipment and infrastructure on the terms
as announced or at all; the ability to successfully integrate the
acquisitions of equipment and infrastructure on an economic basis
or at all; future capital needs and uncertainty of additional
financing, including the Company’s ability to utilize the Company’s
at-the-market offering program (the “ATM Program”) and the prices
at which the Company may sell securities in the ATM Program, as
well as capital market conditions in general; share dilution
resulting from the ATM Program and from other equity issuances;
risks relating to the strategy of maintaining and increasing
Bitcoin holdings and the impact of depreciating Bitcoin prices on
working capital; regulatory and other unanticipated issues that
prohibit us from declaring or paying dividends to our shareholders
that are payable in Bitcoin; continued effects of the COVID19
pandemic may have a material adverse effect on the Company’s
performance as supply chains are disrupted and prevent the Company
from operating its assets; development of additional facilities to
expand operations in Alabama may not be completed on the timelines
anticipated by the Company, or at all; approval of the Public
Service Commission or other regulatory or board approvals being
received on a timely basis, or at all; the acquisition of North
Tonawanda, New York facilities closing on timely basis, or at all;
ability to access additional power from the local power grid; a
decrease in cryptocurrency pricing, volume of transaction activity
or generally, the profitability of cryptocurrency mining; further
improvements to profitability and efficiency may not be realized;
the digital currency market; the Company’s ability to successfully
mine digital currency on the cloud; 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 Annual Information Form of the Company and other
documents disclosed under the Company’s filings at www.sedar.com.
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 current
profitability in mining cryptocurrency (including pricing and
volume of current transaction activity); profitable use of the
Company’s assets going forward; the Company’s ability to profitably
liquidate its digital currency inventory as required; historical
prices of digital currencies and the ability of the Company to mine
digital currencies on the cloud will be consistent with historical
prices; the ability to maintain reliable and economical sources of
power to run its cryptocurrency mining assets; the negative impact
of regulatory changes in the energy regimes in the jurisdictions in
which the Company operates; the ability to adhere to Digihost’s
dividend policy and the timing and quantum of dividends based on,
among other things, the Company’s operating results, cash flow and
financial condition, Digihost’s current and anticipated capital
requirements, and general business conditions; 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 uncertainties therein.
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