Mr. Frank Holmes reports
HIVE ACHIEVES RECORD ANNUAL REVENUE ENDED MARCH 31, 2021 OF $66.7 MILLION AND EARNINGS OF $43.5 MILLION
Hive Blockchain Technologies Ltd. has released its results for the full year ended March 31, 2021 (all amounts are in U.S. dollars, unless otherwise indicated).
Income from digital currency mining was $66.7-million this fiscal year, a 174-per-cent increase from the prior year. Record net income of $42.5-million, up significantly from a loss of $1.9-million a year earlier and $2.9-million lower than the previous quarter. Gross mining margin expanded to $50.1-million from $8.5-million last year, and is $17.1-million higher than that experienced in the prior quarter of $10.6-million. Net income per share grew to 12 cents from a loss of one cent during the prior year and is one cent lower than the previous quarter of Dec. 31, 2020.
"Fiscal 2021 was an incredible year for Hive. Despite the effects of COVID-19, we have achieved record results and continued to increase our ethereum and bitcoin mining capacity," said Frank Holmes, interim executive chairman of Hive.
"During the fiscal year, we assumed direct responsibility for all our cryptocurrency mining operations from our former strategic partner and continued to see significant reductions in the overhead of these operations, which included our ethereum mining facility in Iceland. During the COVID-19 pandemic, we completed the acquisition of Cryptologic Corp. in April, 2020, giving us a substantial bitcoin cloud mining operation in Quebec, Canada. We have continued to expand our capacity at this facility through the purchase and installation of next-generation bitcoin mining equipment.
"Our focus on ethereum mining in Sweden and Iceland continues to be strong as we spent substantial time and capital in upgrading the majority of our GPU memory cards from four gigabytes to eight gigabytes to continue to remain profitable when the DAG file increased. We also undertook a corporate restructuring in Sweden to become a data centre business with a long-term HPC strategy while remaining true to our roots as an ethereum miner.
"Going forward, our focus is on improving efficiency and profitability across our mining operations by optimizing cryptocurrency mining output, continuing to lower costs, and maximizing our existing electrical and infrastructure capacity by installing new mining equipment as quickly as possible to leverage our fixed-cost base and improve future mining margins.
"This expansion and capital spending has been partially facilitated by the $100-million at-the-market program that we commenced in the last quarter of the year. This has allowed us to hodl 25,000 ETH and purchase new ASIC machines to expand and mine bitcoin to hodl.
"As it relates to our industry, ethereum market conditions for miners improved significantly over the last year, driven by price increases and the adoption of the network for decentralized finance applications. Bitcoin mining conditions have also improved with strong price increase since the halving on May 11, 2020, the date when Hive started mining with new generation miners at its facility in Quebec. We continue to believe we are well positioned to benefit from the continued adoption of ethereum and bitcoin globally."
Fiscal year 2021 highlights:
- Generated income from digital currency mining of $66.7-million, with a gross mining margin (1) of $50.1-million;
- Mined 595 bitcoin and over 96,300 ethereum during the year ended March 31, 2021;
- Earned net income of $42.5-million for the year;
- Working capital increased by $86.6-million during the year ended March 31, 2021;
- Digital currency assets of $57.5-million, as at March 31, 2021.
Fiscal 2021 financial review
For the fiscal year ended March 31, 2021, income from digital currency mining was $66.7-million, an increase of approximately 128 per cent from the prior year primarily due to an increase in the production of ethereum and bitcoin stemming from mining expansion, and considerably higher coin prices compared with the prior year.
Gross mining margin (1) during the year was $50.1-million, or 75 per cent of income from digital currency mining, compared with $8.5-million, or 24 per cent of income from digital currency mining, in fiscal 2020. The improvement was primarily due to the company's assumption of control over its operations in Sweden during fiscal 2020, which has resulted in a lower cost of operations than under the company's previous service provider agreement, combined with the cessation of bitcoin cloud mining operations after they became unprofitable in the third quarter of fiscal 2020, and the switch to independent mining at its bitcoin mining facility in Quebec. The company's gross mining margin from digital currency mining is partially dependent on external network factors, including mining difficulty, and the amount of digital currency rewards and fees it receives for mining, as well as the market price of digital currencies.
Net income during fiscal 2021 was $42.5-million, or 12 cents per share, compared with a net loss of $1.7-million, or loss of one cent per share, in fiscal 2020. The improvement was driven primarily by the improvement in gross mining margin (1), higher ethereum and bitcoin prices, gains on the sale of digital currencies, and foreign exchange.
(1) Non-international financial reporting standard measure. A reconciliation to its nearest IFRS measures is provided under "Reconciliations of Non-IFRS Financial Performance Measures" in the company's management's discussion and analysis.
(2) Revaluation is calculated as the change in value (gain or loss) on the coin inventory. When coins are sold, the net difference between the proceeds and the carrying value of the digital currency (including the revaluation) is recorded as a gain (loss) on the sale of digital currencies.
Financial statements and MD&A
The company's consolidated financial statements and management's discussion and analysis thereon for the three months and year ended March 31, 2021, will be accessible on SEDAR under Hive's profile and on the company's website.
Management will host a webcast on Sept. 24, 2021, at 10 a.m. Eastern Time, to discuss the company's financial results. Presenting on the webcast will be Mr. Holmes, Aydin Kilic, president and chief operating officer, and Darcy Daubaras, chief financial officer. Please register for the webcast.
About Hive Blockchain Technologies Ltd.
Hive Blockchain went public in 2017 as the first cryptocurrency mining company with a green energy and ESG (environmental, social and governance) strategy.
Hive is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, it is building a bridge between the digital currency and blockchain sector and traditional capital markets. Hive owns state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it sources only green energy to mine on the cloud and hodl both ethereum and bitcoin. Since the beginning of 2021, Hive has held in secure storage the majority of its ETH and BTC coin mining rewards. Its shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of cryptocurrencies such as ETH and BTC. Because Hive also owns hard assets such as data centres and advanced multiuse servers, it believes its shares offer investors an attractive way to gain exposure to the cryptocurrency space. Hive traded over two billion shares in 2020.
(1) Non-IFRS measure.
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