Argo Blockchain PLC · NASDAQ:ARBK
Argo Blockchain — Q2 2023 Earnings Presentation
25 slides from Argo Blockchain's earnings presentation, Aug 29, 2023
Slide 1: Argo Blockchain Q2 2023 Results
ARGO BLOCKCHAIN Q2 2023 Results August 29, 2023 argoblockchain.com 1 NASDAQ: ARBK; LSE: ARB
Slide 2: Legal Disclaimers
LEGAL DISCLAIMERS Forward Looking Statements Non-IFRS Measures This presentation contains inside information and includes forward-looking statements This presentation contains references to certain non-IFRS measures including Adjusted which reflect the Company's current views, interpretations, belie
Slide 3: Today's Presenters
Today’s Presenters Seif El-Bakly Jim MacCallum Interim Chief Executive Officer / Chief Financial Officer Chief Operating Officer 3
Slide 4: Laying a Strong Foundation for Success
Laying a Strong Foundation for Success Financial Discipline Operational Excellence Key Pillars ₿ Growth & Strategic Partnerships 4
Slide 5: Q2 2023 Results (Unaudited)
Q2 2023 Results (Unaudited) Operational Highlights ● Mined 456 Bitcoin, or 5.0 BTC per day Mining Revenue ($m) $12.6 ● Generated revenue of $12.6 million $11.4 ● Q2’23: Mining margin of 36%, with an average direct cost per Bitcoin mined of $17,566 (42% for H1 2023)1 Q1’23 Q2’23 ● Accrued ~$1.1 milli
Slide 6: Q2 2023 Results (cont.)
Q2 2023 Results (cont.) $ in millions Q1’23 Q2’23 % Change 1H’23 Revenue $11.4 $12.6 10% $25.0 Direct costs, net (5.8) (8.0) 38% (13.8) Mining Profit $5.6 $4.5 (19)% $10.2 Mining Margin Percentage 49% 36% 42% Restructuring costs $0.8 $0.6 (26)% $1.4 Non-mining operating $4.4 $3.5 (19)% $7.9 expenses
Slide 7: Financial Discipline - Cash Position
Financial Discipline - Cash Position Equity raise strengthens balance sheet and improves liquidity Post period events 7
Slide 8: Financial Discipline - Cost Reduction
Financial Discipline - Cost Reduction Cost reduction improves cash flow generation and strengthens balance sheet Non-Mining Operating Expenses ($M) $16.5 ~7 5% Non-mining operating expenses c os Non-recurring restructuring costs t re du cti on $10.7 $5.2 $4.1 $4.4 $3.5 H2 2022 Q1 2023 Q2 2023 Quarte
Slide 9: Financial Discipline - Debt Reduction
Financial Discipline - Debt Reduction Significant deleveraging over last twelve months Sources of capital for further debt reduction ~4 7% ● Operating cash flow de bt re du ○ Existing operations ctio n ○ Further cost reductions ○ New revenue from BlockMiner deployment ● Sale of non-core assets ○ Exc
Slide 10: Operational Excellence
Operational Excellence Optimizing and expanding current operations ● 1,242 ePIC BlockMiners deployed in July 2023 Growing total hashrate capacity ● Expect to deploy 1,628 remaining machines in the coming months 2.8 EH/s ● Working with Galaxy to improve operational 2.6 EH/s efficiency of fleet at Hel
Slide 11: Growth & Strategic Partnerships
₿ Growth & Strategic Partnerships Bitcoin mining allows for instant monetization of energy ● We are evaluating novel opportunities with power generators and utilities to help capture the full economic value of stranded energy ● Focus on access to low-cost and reliable power ● Growth will be asset li
Slide 12: Laying a Strong Foundation for Success
Laying a Strong Foundation for Success Financial Discipline Operational Excellence Key Pillars ₿ Growth & Strategic Partnerships 12
Slide 13: Q&A
Q&A 13
Slide 14: Appendix
Appendix 14
Slide 15: Argo's Commitment to Sustainability
Argo’s Commitment to Sustainability Mining with carbon-neutral energy Quebec facilities powered by hydro electricity Helios facility in Texas is in West Load Zone - high amount of wind power generation Texas operations help to stabilize the electric grid Local, flexible demand in a region with exces
Slide 16: Income Statement (Unaudited)
Income Statement (Unaudited) 1. 2023 figures translated at £1.00 to $1.2331; 2022 figures translated at £1.00 to $1.29751. 2. 2. Net income = Profit after taxation 16
Slide 17: Balance Sheet (Unaudited)
Balance Sheet (Unaudited) 1. 17 Q2 2023 figures translated at £1.00 to $1.2625; Q1 2023 figures translated at £1.00 to $1.2337.
Slide 18: Cash Flow Statement (Unaudited)
Cash Flow Statement (Unaudited) 18 1. 2023 figures translated at £1.00 to $1.2331; 2022 figures translated at £1.00 to $1.29751. 2. 2. Net income = Profit after taxation
Slide 19: Appendix: Non-IFRS Reconciliation (Unaudited)
Appendix: Non-IFRS Reconciliation (Unaudited) The following table shows a reconciliation of mining profit to gross profit, the most directly comparable IFRS measure, for the six months ended June 30, 2023 and the six months ended June 30, 2022. The following table shows a reconciliation of EBITDA to
Slide 20: Capital Structure (Unaudited)
Capital Structure (Unaudited) Capitalization Share Capital Outstanding Ordinary Shares: 535 million1 Options: 10 million3 Warrants: 0.7 million Tickers Equity Securities: LSE Ordinary Shares: ARB Nasdaq ADSs: ARBK OTC: ARBKF Debt Securities: 20 Unsecured notes (Nasdaq): ARBKL 1. As of 8/28/2023 2. A
Slide 21: 2021 GHG Report Results
2021 GHG Report Results 01 02 03 Argo intentionally locates Most of Argo’s GHG emissions Scope 3 GHG emissions come operations on grids with low (66%) come from Scope 2 mostly from fuel and energy carbon emissions. Argo does (electricity use). related activities and not produce Scope 1 emissions. up
Slide 22: How Bitcoin is Mined
How Bitcoin is Mined Bitcoin transactions Once a block is Transactions are Verified transaction For solving the block, are pooled together formed, miners “verified” by the block is attached to miners are rewarded in a “block”. compete to solve it. network. a chain. with bitcoin. Currently, the rewar
Slide 23: Business Model in Bitcoin Mining
Business Model in Bitcoin Mining Electricity Computing Power Transaction Fees Electricity Cost Bitcoin Reward Power Source Mining Equipment Bitcoin Network Bitcoin Mining Considerations Revenue consists of block reward plus a transaction fee Costs include electricity and purchases of miners On avera
Slide 24: Calculating Gross Mining Profitability
Calculating Gross Mining Profitability The Model Is Formulaic Bitcoin Mining Considerations Revenue consists of block reward plus a transaction fee Reward is dependent upon the difficulty set by the network hash rate versus Argo’s hash rate Number of block rewards is fixed Key costs of mining includ
Slide 25: argoblockchain.com
eliele argoblockchain.com