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Publicly listed mining company Hive Blockchain (HVBTF) reported a profit in the second quarter even as the company continued its “big spend” on upgrading its mining facilities.
Hive grossed $ 13 million in quarterly revenue from mining, according to its second-quarter earnings report on Tuesday, 8% up from $ 12 million a year ago.
The company posted a profit of $ 7.4 million, or $ 0.03 per share, a significant increase from its loss of $ 1.8 million in the same period last year, or $ 0.04 per share. Gross mining margin increased to $ 9.2 million, from a loss of over $ 560,000 last year.
“We have been able to reduce costs, which has resulted in the highest cash flow in any quarter since Hive went public three years ago,” said Frank Holmes, interim executive president. Cash flow was $ 10.6 million, compared with a loss of $ 4.6 the previous year.
As one of the largest ether mining companies, Hive has noticed a year-over-year decrease in bitcoin mining due to the termination of previous cloud mining deals, which have become unprofitable. However, the company has significantly increased its mining capacity and used Ether mining profit margins to enable the “acquisition and initial scaling” of new bitcoin mining operations.
The ongoing coronavirus pandemic has “delayed the ability to acquire and deploy” its new bitcoin mining operations, Hollmes said on the company’s earnings call. But the company maintains its goal of 1,000 petahashs per second (PH / s) “in the future,” Holmes said.
Shares in the Vancouver-based company outperformed ether’s year-to-date returns by 880 percentage points. Hive shares have gained over 1,200% year to date, trading close to $ 1.22 at the last check.
The company’s predominant focus on ether mining represents its bullish outlook on cryptocurrency versus bitcoin. “We think Ethereum will catch up with bitcoin in a relative way,” Holmes told investors.
“There has been a large investment this quarter in upgrading all of our facilities,” said Holmes, adding that the process still has “a long way to go”. By the end of January 2021, he said he expects Hive to have fully upgraded the 4GB GPU mining chips to the 8GB chip and “become an even bigger player” in Ethereum mining.
Beyond its mining capabilities, Holmes reiterated his view that the company acts as a “proxy for people who are reluctant to use a cryptocurrency exchange or create their own wallet and buy cryptocurrency.”
The dollar value of Hive’s cryptocurrency earnings grew to $ 10.7 million, an increase of nearly 50% from $ 7.2 million during the same period last year. CFO Darcy Daubaras told investors that Hive “loves keeping an inventory of coins,” but the company is selling current production to fund its ongoing operational upgrades.
“We had to speed up coin sales a bit to fund upgrades to GPU mining chips,” Daubaras said. “But we believe it is important to maintain a good inventory of bitcoin and ethereum.”
