Argo Blockchain PLC earnings soar in 2021, expects mining capacity to triple in 2022

Argo Blockchain PLC (LSE:ARB, OTCQX:ARBKF, NASDAQ:ARBK, ETR:0XP) reported a near sevenfold surge in earnings last year and said it expects to more than triple its Bitcoin mining capacity in the coming year as mining operations begin next month at its new Helios mining facility in Texas.

Announcing results for the 2021 calendar year, in which it expanded its mining capacity from 0.6 Exahash per second (EH/s) to 1.6 EH, the cryptocurrency miner said it expects to achieve 5.5 EH/s of hashrate capacity by the end of 2022.

It said this increase is driven by the installation of the Bitmain S19J Pro machines and the deployment of custom-designed mining machines utilizing Intel’s state-of-the-art ASIC Blockscale chips, which have been purchased and are due to be delivered and installed in batches from May to October this year.

Additional capital spending to complete the first phase of getting Helios on-line is expected to be in the range of £93-100mln ($125-135mln), which the company said will be non-dilutive to shareholders as it will be financed primarily through debt and proceeds from selling a portion of Bitcoin mined each month.

Beyond 2022, hashrate is expected to surge to more than 20 EH/s over the next few years as part of the additional 600 MW of capacity planned for Helios.

Texas update!

The facility is filling up with miners and our team is all hands on deck – Helios launch in sight! ????#ARB $ARBK pic.twitter.com/lRTljCwHY9

— Argo (@ArgoBlockchain) April 21, 2022

For 2021, the company posted revenue up 291% to £74.2mln, which it said was driven by a significant increase in Argo’s hashrate, the temporary drop in difficulty on the Bitcoin network, and higher Bitcoin prices.

A total of 2,045 Bitcoin were mined in the year, 17% lower than in 2020, with the decrease attributed to the halving event that occurred in May 2020, which reduced the block award from 12.5 to 6.25 Bitcoin per block.

But Argo’s mining margin doubled to 84, helped by the increased market price and decline in global hashrate following the Chinese mining ban last May.

Underlying earnings (EBITDA) jumped 594% to £52.9mln, with net income up more than 2,000% to £30.8mln.

Cash and digital assets at year-end stood at £92.6mln based on the Bitcoin price at that time, with the figure up to £93.6mln at the end of last month, when the group held 2,700 Bitcoin and Bitcoin Equivalents.

Chief executive Peter Wall said: “2021 was truly a year of transformation for Argo as we accomplished key milestones to strengthen the foundation of the Group and position us for long-term success through the acquisition of the Helios project and our dual listing on Nasdaq.

“The acquisition of Helios provided us with the opportunity to build a best-in-class, vertically-integrated facility with access to low-cost and sustainable electricity, which is unmatched by our peers. With our mining operations at Helios expected to commence in May, along with the development of custom mining machines using Intel’s next-generation Blockscale ASIC chips, Argo is well-positioned to continue its growth with a focus on delivering for our shareholders. Onwards and upwards.”