ZUG, Switzerland and VANCOUVER, Feb. 28, 2018 /CNW/ - HIVE Blockchain
Technologies Ltd. (TSX.V:HIVE) (OTC:HVBTF) (the "Company" or
"HIVE") today announced its results for the third quarter ended
December 31, 2017 (all amounts in US
dollars, unless otherwise indicated).
Quarterly Highlights
- Expanded operations in Iceland
with acquisition of second phase of GPU-based mining rigs from
Genesis Mining Ltd. ("Genesis"), bringing the Company's digital
currency mining footprint in Iceland to 3.8 megawatts ("MW");
- Solidified strategic partnership with Genesis with agreements
to jointly construct two state-of-the-art data centres in
Sweden to add a further
40.4 MW of capacity by September
2018, including 20.4 MW dedicated to mining GPU-based
digital currencies such as Ethereum, Ethereum Classic and ZCash
(the "Sweden GPU Data Centre) and 20.0 MW dedicated to mining
SHA-256-based digital currencies such as Bitcoin and Bitcoin Cash
(the "Sweden Bitcoin Data Centre");
- Raised $147 million (CDN
$187 million) of growth capital in
the quarter to finance rapid expansion and future growth
opportunities and investments;
- Generated revenues of $3,274,186,
with a gross mining margin (Note 1) of $2,382,687, from mining of digital currencies at
Iceland facilities;
- Net income of $149,724 for the
period
- Accumulated and held $5,827,805
worth of newly minted Ethereum, Ethereum Classic and ZCash as at
December 31, 2017;
- Return on investment of 36% by December
2017 through investment of $16,284,690 in data centre equipment since
September 2017 which has generated
digital currencies with a value of $5,827,805.
Subsequent to the quarter, on January 15,
2018, HIVE commenced mining operations from the initial
6.8 MW phase of the Sweden GPU Data Centre, nearly tripling
its global footprint of energy consumption dedicated to digital
currency mining to 10.6 MW. This has contributed to a strong
increase in the Company's digital currency portfolio to a total
value of $13,624,783 as at
February 26, 2018. The construction
and configuration of the second and third phases of the Sweden GPU
Data Centre is proceeding on-schedule and will increase HIVE's
capacity by an additional 13.6 MW within two months, with the
20.0 MW Sweden Bitcoin Date Centre to follow by September 2018.
"In the third quarter of Fiscal 2018, we made significant
progress in our expansion plans," commented Harry Pokrandt, President, CEO and a Director at
HIVE. "The Company's second acquisition in Iceland commenced operations, contributing to
rising mining revenues and margins, and a transformational 2018
build-out schedule was finalized and fully financed, which will see
a more than ten-fold increase in energy consumption dedicated to
mining activities compared to that which was operational at
quarter-end. We continue to evaluate future mining sites in stable
jurisdictions with access to reliable, clean and inexpensive
power."
Financial Review
In the quarter, HIVE acquired and launched operations of the
second phase at its digital currency mining centre in Iceland. Included in the financial results for
the quarter ended December 31, 2017
is a full quarter of operations from the initial 2.05 MW of mining
capacity plus operations from the 1.75 MW expansion from
October 13, 2017 which, combined,
resulted in revenues of $3,274,186
and a gross mining margin of $2,382,687 (see Note 1).
Total assets increased to $163,986,233 as at December 31, 2017 from $478,915 at March 31,
2017, due primarily to the completion of the transactions
with Genesis and financings during the period. The significant
assets of the Company at December 31,
2017 consisted of cash of $99,082,749, digital currencies of $5,827,805, a cash deposit of $32,000,000 for the Sweden GPU Data Centre, and
computing equipment in Iceland of
$15,250,404. The increase in total
assets during the nine months ended December
31, 2017 results primarily from a net $150,100,974 raised from private placements,
along with the mining revenue and revaluation of digital currencies
of $5,827,805.
Operating and maintenance costs for the three and nine months
ended December 31, 2017 were
$891,499 and $949,359, respectively, consisting of fees paid
to Genesis under a master services agreement between HIVE and
Genesis, which includes electricity, daily monitoring and
maintenance, facility costs and all other costs directly related to
the maintenance and operation of the Company's mining
equipment.
The Company's net income from continuing operations after tax
for the three and nine months ended December
31, 2017 was income of $149,724 and a loss of $19,690,038; the nine month period ended
December 31, 2017 included a one time
charge of $16,340,247 related to the
Company's initial transaction with Genesis. General and
administration expenses for the three and nine months were
$3,283,833 and $6,826,171 respectively, which included non-cash
charges for share based compensation of $1,827,024 and $4,533,663 for each of the three and nine months.
Ongoing general and administration expenses relate to the Company's
rapid growth plan and compliance costs of being a public
company.
Outlook
HIVE continues to execute on its aggressive growth strategy to
maintain its position as a market leader in the blockchain
infrastructure industry and is fully financed to build out and
bring online the balance of the Sweden GPU Data Centre by
April 2018 and the Sweden Bitcoin
Data Centre by September 2018.
HIVE's annualized run rate revenue (defined below) is projected
to be $153 million once its announced
Sweden expansion is fully online,
which is expected by September 2018.
The annualized run rate revenue is calculated strictly on the basis
of value of the digital currency earned at the time of mining, and
does not include any adjustment for revaluation gains (or losses)
for digital currencies held after that date. Please refer to the
Company Management Discussion and Analysis for the third quarter
ended December 31, 2017 available on
www.sedar.com for a detailed analysis of the sensitivities of the
underlying assumptions of digital currency prices and network
hashrates used for the annualized run rate revenue.
The following chart shows the growth in HIVE's annualized run
rate revenue for each phase of its announced 2018 expansion based
on crypto prices and network assumptions noted below as of
February 26, 2018. The increase in
the annualized run rate revenue in each phase is primarily due to
the increase in mining rigs and related MW consumption.
![FIGURE 1: HIVE Development Schedule and Annualized Run Rate Revenue (CNW Group/HIVE Blockchain Technologies Ltd.) FIGURE 1: HIVE Development Schedule and Annualized Run Rate Revenue (CNW Group/HIVE Blockchain Technologies Ltd.)](https://mma.prnewswire.com/media/648143/HIVE_Blockchain_Technologies_Ltd__HIVE_Blockchain_Releases_Fisca.jpg)
Annualized Run Rate Revenue: The Company uses the annualized
run rate revenue to provide a measure of the financial performance
of the Company using current financial information at a point in
time. The annualized run rate revenue is a snapshot of the
Company's potential revenue extrapolated over a period of one year,
based on current assumptions as stated. The Company is not making
projections on the future digital currency prices, network
difficulty rates and network mining rewards and the annualized run
rate revenue is not necessarily indicative of the Company's future
earnings. The network hashrate (or 'network difficulty') is the
measuring unit of the processing power of the entire network for a
specific algorithm (for example, Bitcoin or Ethereum). The
daily network mining rewards are the total daily rewards issued for
the blocks solved that day; daily network rewards are fixed based
on the specific algorithm. Actual results will vary based on
change in these assumptions. As at February
26, 2018, the Company utilized the following
assumptions:
- Ethereum Price:
US$868
- Ethereum
Network Hash Rate: 247,529GH/s
- Total Daily
Ethereum Rewards: 20,355 Ethereum
|
- Bitcoin
Price: US$10,349
- Bitcoin Network
Hash Rate: 21,079PH/s
- Total Daily
Bitcoin Rewards: US$18.3M
|
"HIVE and our strategic partners, Genesis, are leading the
development of the infrastructure needed to power the expanding
global blockchain ecosystem." said Frank Holmes, Chairman of HIVE Blockchain.
Genesis' innovative hardware and software tools enable us to run
highly efficient mining operations, which directly feeds into our
annual revenues. We started HIVE with a vision to go from a revenue
run rate of $1 million per month to
$1 million per week and now, by
September 2018, HIVE's annualized run
rate revenue is over $150 million, or
$3 million per week."
Financial Statements and MD&A
The Company's Financial Statements and Management's Discussion
and Analysis (MD&A) for the three and nine months ended
December 31, 2017 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 Thursday, March 1, 2018 at 5:30am Pacific Time/8:30am
Eastern Time to discuss the Fiscal 2018 Third Quarter
financial results. Presenting on the webcast will be Harry Pokrandt, CEO, President and Director and
Jessica Van Den Akker, Chief
Financial Officer. Analysts and interested investors are invited to
participate.
Click here to register for the webcast.
The webcast will be archived for later playback on HIVE's
website.
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 is strategically partnered
with Genesis Mining Ltd. to build the next generation of blockchain
infrastructure. 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, and provides 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.
"Harry Pokrandt"
President, CEO and Director
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.
Note 1
The Company has presented certain non-IFRS measures in this
document. The Company believes that these measures, while not a
substitute for measures of performance prepared in accordance with
IFRS, provide investors an improved ability to evaluate the
underlying performance of the Company. These measures do not have
any standardized meaning prescribed under IFRS, and therefore may
not be comparable to other issuers. As the Genesis transaction
closed in September 2017, these
measures are not available or meaningful for periods prior to this
date.
Gross Mining Margin: The Company believes that, in addition
to conventional measures prepared in accordance with IFRS, it is
helpful to investors to use the gross mining margin to evaluate the
Company's performance and ability to generate cash flows and
service debt. Accordingly, this measure does not have a standard
meaning and is intended to provide additional information and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. For
further detail on the gross mining margin, please refer to the
Company's Management Discussion and Analysis for the third quarter
ended December 31, 2017 available
on www.sedar.com.
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 Company's build-out and expansion of
digital currency operations (including expansion into Bitcoin and
Bitcoin Cash mining) into Sweden
and expected timing thereon; the expected electrical and mining
capacity in Sweden; 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. This news
release also contains "financial outlook" in the form of annualized
run rate revenue, 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 annualized run rate revenue disclosed in this news
release is based on the assumptions disclosed in this news release
and in the Company's Management Discussion and Analysis for the
third quarter ended December 31, 2017
available on www.sedar.com, 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. Factors that could cause actual results to
differ materially from those described in such forward-looking
information include, but are not limited to, the construction and
operation of the digital currency mining centre in Sweden may not occur as currently planned, or
at all; the ongoing partnership with Genesis; the quantum of
electrical consumption and mining capacity at the digital currency
mining centres in Sweden may not
materialize as currently anticipated, or at all; the digital
currency market; the Company's ability to successfully mine digital
currency; revenue of the Company may not increase as currently
anticipated, or at all; 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 September 13, 2017.
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 complete the construction of digital currency operations
in Sweden; the Company will be
able to profitably liquidate its digital currency inventory as
required; the Company's ongoing partnership with Genesis;
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. Additionally, gross mining
margins referred to in this news release are also based on
assumptions set out herein and in the Company's Management
Discussion and Analysis for the third quarter ended December 31, 2017 available on
www.sedar.com, 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. 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.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
SOURCE HIVE Blockchain Technologies Ltd.