Argo Blockchain PLC · NASDAQ:ARBK
Argo Blockchain — Q1 2023 Earnings Presentation
25 slides from Argo Blockchain's earnings presentation, Jun 6, 2023
Slide 1: Argo Blockchain Q1 2023 Results
ARGO BLOCKCHAIN We power the world’s most innovative and sustainable Q1 2023 Results blockchain infrastructure June 6, 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: Q1 2023 Results (Unaudited)
Q1 2023 Results (Unaudited) Operational Highlights Ended the quarter with $14 million of cash Mining Margin Percentage 49% Mined 491 Bitcoin, or 5.3 BTC per day 35% Generated revenue of $11.4 million Mining margin of 49%, with an average direct cost per Q4’22 Q1’23 Bitcoin mined of $11,8111 Average
Slide 6: Q1 2023 Results (cont.)
Q1 2023 Results (cont.) $ in millions Q1’23 Q4’22 % Change Revenue $11.4 $10.0 15% Direct costs (5.8) (6.5) (11)% Mining Profit $5.6 $3.5 63% Mining Margin Percentage 49% 35% 42% Restructuring costs $0.8 $5.83 (86)% Non-mining operational $4.1 $10.73 (62)% expenses1 Total non-mining operational $4.9
Slide 7: Financial Discipline - Cost Reduction
Financial Discipline - Cost Reduction Strong emphasis on reducing non-mining operating expenses and G&A ~70 %c ost r ed uc tio n 1 7 1. Excludes depreciation of $8.6m and foreign exchange loss of $(21.4)m from the 2022 operational and administrative expense figure of $34.1 million
Slide 8: Financial Discipline - Cash Position
Financial Discipline - Cash Position Cost reduction improves cash flow generation and strengthens balance sheet One-time, non-recurring Operating Cash restructuring Flow (excluding costs: $(0.8)m Working capital restructuring changes: costs and $(3.7)m working capital Interest & Debt changes): Payme
Slide 9: Financial Discipline - Debt Reduction
Financial Discipline - Debt Reduction Debt Balance as of 3/31/2023 Potential sources of capital for debt reduction ● Operating cash flow ○ Existing operations ○ Further cost reductions ○ New revenue from BlockMiner deployment ● Sale of non-core assets ○ Excess inventory ○ Digital assets ○ Real estat
Slide 10: Operational Excellence
Operational Excellence Optimizing and expanding current operations ● Expect to deploy ePIC BlockMiner machines in the coming months 2.8 EH/s % 12 ● Signed agreement with City of Baie 2.5 EH/s Comeau for 8 MW expansion (expected in late 2024) 10 Current Expected
Slide 11: Growth & Strategic Partnerships
₿ Growth & Strategic Partnerships Bitcoin mining allows for instant monetization of energy ● We are evaluating unique 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 prudent
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. Q1 2023 figures translated at £1.00 to $1.2216; Q1 2022 figures translated at £1.00 to $1.31309. Second half 2022 figures translated at £1.00 to $1.2089 16 2. 2. Net income = Profit after taxation
Slide 17: Balance Sheet (Unaudited)
Balance Sheet (Unaudited) 17 1. 2023 figures translated at £1.00 to $1.2334; 2022 figures translated at £1.00 to $1..2058.
Slide 18: Cash Flow Statement (Unaudited)
Cash Flow Statement (Unaudited) 18 1. Q1 2023 figures translated at £1.00 to $1.2216;
Slide 19: Appendix: Non-IFRS Reconciliation (Unaudited)
Appendix: Non-IFRS Reconciliation (Unaudited) The following table shows a reconciliation of EBITDA to net income, the most directly comparable IFRS measure, for the three months ended March 31, 2023 and the three months ended March 31, 2022. 19 1. Q1 2023 figures translated at £1.00 to $1.2216; Q1 2
Slide 20: Capital Structure (Unaudited)
Capital Structure (Unaudited) Capitalization Share Capital Outstanding Ordinary Shares: 478 million 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 6/1/2023 2. As
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: We power the world's most innovative and sustainable blockchain infrastructure
We power the world’s most innovative and sustainable blockchain infrastructure. argoblockchain.com 25