Chief Financial Officer John Rim commented that despite a challenging start to the year as a result of Bitcoin's lower prices, Bitfarms secured $ 20 million in financing in the first quarter of 2019. The capital raised by the firm was deployed to increase the infrastructure capacity of the data center from 34 MW to 64 MW and invest in mining equipment at competitive market prices. The objective of this investment, according to Rim, was to increase the computing power to more than 780 PH by the end of the year.
The company's CFO further explained that the increased scale of operations and the addition of new and more efficient mining equipment allowed Bitfarms to reach a healthy gross gross margin of 60% , earn USD 10.6 million of adjusted EBITDA and end the year in a manner profitable with a net profit of USD 2.1 million.
For his part, Emiliano Grodzki , CEO of Bitfarms, reported that:
2019 was a transformative year for Bitfarms with many important milestones. In addition to the significant operational growth achieved in 2019, we successfully completed our listing on the TSXV through a comprehensive prospect process and the company is now positioned as one of the largest and most efficient public crypto mining operations in the world.
Grodzki said he was very pleased to have had a profitable year with fully diluted basic earnings per share of $ 0.04. And he expects the company to continue executing its growth strategy, which includes the construction and operation of an available energy pipeline in Québec, in the short to medium term.
Regarding the 2019 financial summary of Bitfarms we can highlight:
► Consolidated income of USD 32.4 million, gross profit of USD 11.4 million (gross profit margin of 35%) and net income of USD 2.1 million in 2019.
► Gross profit from mining operations of USD 17.7 million (60% of gross margin of mining) in 2019 compared to $ 23.2M (73% of gross margin of mining) in 2018.
►EBITDA of USD 9.6 million (EBITDA margin of 30%) and Adjusted EBITDA of USD 10.6 million (Adjusted EBITDA margin of 33%) in 2019 compared to an EBITDA loss of USD 5.6M (EBITDA margin of -16 %) and an adjusted EBITDA of USD 15.3 million (45% Adjusted EBITDA Margin) in 2018.
►Mined 3865 Bitcoin and 7561 Litecoin with an average 2019 Bitcoin equilibrium price of $ 2996 and an average Litecoin equilibrium price of $ 49.
► USD 20.0 million debt financing completed and funds deployed to increase infrastructure capacity from 34 MW to 64 MW (88% increase) and increase hashrate to approximately 780 PH (~ 270% increase) for purposes of 2019.
► Bitfarms total revenue for 2019 was USD 32.4 million (USD 33.8 million in 2018). This 4% decrease was due to a drop in altcoins sold (i.e.Bitcoin Cash, Ether, and Litecoin) as well as a drop in Bitcoin's average selling price in 2019 compared to 2018 ($ 7412 in 2019 compared with USD 7904 in 2018) offset by an increase in Bitcoin mined, as a result of the increase in Bitfarms' average hashrate exceeding the network's average difficulty, and an increase in Volta revenue in 2019 compared to 2018.
► Bitfarms cost of sales for 2019 was USD 21.0 million (USD 22.9 million in 2018). Costs of sales include energy and infrastructure expenses, rental expenses, depreciation and amortization, electricians' wages and purchases, and net inventory changes.
► Energy and infrastructure expenses increased by USD 3.2 million or 37% in 2019 compared to 2018, as Bitfarms added new mining equipment that increased electricity consumption from 22 MW in late 2018 to approximately 53 MW in late 2019 .
► Gross profit: in 2019, Bitfarms made a consolidated gross profit of USD 11.4 million (35% gross margin) on consolidated income of USD 32.4 million, compared to a gross profit of USD 10.9 million (32% gross margin) on consolidated income of USD 33.8 million in 2018.
Sobre Bitfarms Ltd.
Bitfarms owns and operates computer centers that drive the decentralized global financial economy. The company provides computing power to cryptocurrency networks like Bitcoin, earning fees from each network to secure and process transactions. Developed by clean and competitively priced hydropower, Bitfarms operates 5 computer centers in Québec, Canada. Bitfarms' experienced management team includes industrial-scale data center operators and capital markets professionals, focused on building infrastructure for the future by developing and hosting the ecosystem that grows around blockchain-based technologies.