BY CNA Team - November 9, 2018
Hut 8’s mining operations hit by higher costs
Hut 8, a Toronto-based publicly traded bitcoin miner, posted a net loss of US$8.68mil for the third quarter ended Sept 30 as the cost of mining bitcoins rose and margins fell.
Revenue for the quarter under review was US$13.4mil, which the company says in a stock exchange filing was the largest ever for a single quarter and a 126% increase from the prior quarter.
The company says that adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) came in at US$5.44mil, an 86% increase compared to the previous quarter, reflecting revenue from the City of Medicine Hat facility in Alberta.
It says mining profit margin and adjusted Ebitda margins were lower in the quarter under review due to bitcoin price’s marginal appreciation combined with increased competition.
It adds that record-setting summer temperatures also caused the price of electricity to increase, which increased costs.
However, the company remains one of the lowest-cost miners as its cost for mining one bitcoin in the third quarter was US$3,394, compared to the average price of approximately US$6,500.
For the third quarter, mining margin was 51% and mining profit was US$6.77mil. For the cumulative nine-month period, mining margin was 62% and mining profit was US$17.22mil.
Image courtesy of Hut 8 website.