ZUG, Switzerland and VANCOUVER, Sept. 30, 2019 /CNW/ - HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (OTCQX:HVBTF) (the "Company" or "HIVE") announces its results for the fourth quarter and full year ended March 31, 2019 (all amounts in US dollars, unless otherwise indicated).
"Over the past year, HIVE has undergone significant changes which have improved transparency and accountability from strategic partners which will allow us to better manage our business," said Frank Holmes, Interim Executive Chairman of HIVE. "We weathered a challenging period for cryptocurrency and blockchain companies as the value of Bitcoin and Ethereum underwent tremendous erosion of value causing a massive fall in the cost of computing equipment. However, we opportunistically added Bitcoin capacity at attractive financial terms."
"Since becoming interim CEO and adding a full-time CFO, we have restructured the company to strengthen our operational control of HIVE and improved our cost structure," said Frank. "There is more to be done but I am certain that the work done during the fiscal year and throughout 2019 has better positioned the Company for growth."
"We are pleased by the financial results from our 300 Petahashes of Bitcoin mining capacity and the progress we have seen in our Ethereum mining following the restart of Sweden with Blockbase, our new operational partner, subsequent to the end of the 2019 fiscal year." added Mr. Holmes.
"Our financial performance reflects the benefits of scale as we generated significant growth in revenue during fiscal 2019 against fiscal 2018," added Frank Holmes. "We made the prudent decision to write-down certain assets in fiscal 2019, a non-cash impairment charge that reflects dramatic industry changes and volatility of cryptocurrencies since we went public in 2017. The cost of new GPU chips declined dramatically in fiscal 2019 against the backdrop of Ethereum prices falling from more than $1,400 at the start of 2018 to less than $100 at the end of that year while Bitcoin fell from more than $14,000 to under $4,000 in the same timeframe."
"These were unprecedented drops in currency and the capital equipment that I have not seen in my 40 years as an investor," noted Frank Holmes. "I want to stress that these impairments are non-cash charges, no cash went out the door, it is strictly an accounting treatment. That said, HIVE also benefited from the trend as we were able to scale our mining operations at lower than historical costs and we are realizing the benefits as Bitcoin prices have increased from $3,826 at the start of 2019 to highs of nearly $13,000 in June 2019. Similarly, Ethereum started the year at $130 and exceeded $330 in June 2019."
"Further, we have witnessed important industry milestones as companies like JP Morgan and Facebook have embraced cryptocurrency and that adoption by consumers is on the rise," said Frank Holmes. "We continue to believe that we are in the early innings of the evolution of blockchain and it is my opinion that HIVE is positioned for growth and as leaders in the industry. We learned valuable lessons during the crypto bear market which resulted in us demanding greater transparency and accountability from our business partners while reducing our costs."
FY 2019 Highlights
Generated revenues of $31.8 million, a 143% increase over FY2018, with a gross mining margin1 of $7.0 million, from mining of digital currencies;
Mined over 82,000 newly minted Ethereum during year ended March 31, 2019, representing an increase of 329% over prior year production, despite a shutdown of the facility in Sweden during a portion of the year;
And mined 1,751 newly minted Bitcoin during year ended March 31, 2019. The company did not mine Bitcoin in the prior year;
Recognized a non-cash impairment charge of $90.9 million related to our data centre equipment, SHA-256 ASIC capacity, and land development rights in Norway;
Incurred a loss of $137.8 million for the year;
Increased its mining capacity over the prior year by 318% by adding an additional 7 MW of data centre equipment and 300 PH of SHA-256 ASIC capacity; and
Diversified its production range with the addition of cloud-based Bitcoin mining.
For the year ended March 31, 2019, HIVE's gross mining margin was 22%. Fourth quarter income from digital currency mining was produced from an average of 14.0 MW of GPU production capacity, and 300 PH of Cloud Mining capacity, as at March 31, 2019. Below is an analysis of the Company's income and gross mining margin:
Full story available on Benzinga.com