- Hut 8 Mining (HUT) has released its disappointing financial results for the second quarter of 2020, which took a hit following the bitcoin halving event
- The company reported a 165 per cent drop in gross profit for the period from C$9.7 million in the second quarter of 2019 to a loss of $6.4 million this year
- Total revenue also fell 67 per cent to $9.2 million, compared $28 million last year
- Similarly, net income fell 92 per cent to $2.4 million from more than $30.8 million in 2019
- Hut 8 Mining (HUT) is currently down 1.74 per cent to $1.13 per share at 1:33pm EDT
Hut 8 Mining (HUT) has released disappointing financial results for the second quarter, which took a hit following the bitcoin halving event.
The Toronto-based cryptocurrency miner reported a 165 per cent drop in gross profit for the period, from C$9.7 million in the second quarter of 2019 to a loss of $6.4 million this year.
Total revenue also fell 67 per cent to $9.2 million from $28 million, as did Hut 8’s net income, which slid 92 per cent to $2.4 million from more than $30.8 million in 2019.
Hut 8’s struggles began with the fallout of the COVID-19 pandemic, which was then compounded by the bitcoin halving event in mid-May. Bitcoin halvings are programmed to occur every 210,000 blocks, or approximately every four years, until the maximum bitcoin supply of 21 million has been generated.
The original idea behind the halving was to create a similar commodity to gold, only digitised: the more you mine, the more difficult it becomes to find. As such, this latest halving reduced the bitcoin reward per block from 12.5 to 6.25, effectively cutting the company’s potential revenue in two.
However, Hut 8 said it had anticipated the effect of the bitcoin halving, and has worked to establish a very lean and flexible operation by reducing costs where necessary.
The company cut its site operating costs by 17 per cent, reducing the $10.4 million spent in the second quarter of 2019 to $8.6 million this year.
Hut 8 also managed to drop its net finance expense to $700,000, representing a 43 per cent decrease compared to $1.2 million the prior year.
In addition, a further reduction was negotiated in the interest rate of the company’s debt, from 9.85 per cent to 8 per cent per annum, provided bitcoin prices remain above US$6,500.
Hut 8 Mining (HUT) is currently down 1.74 per cent and is trading $1.13 per share at 1:33pm EDT.
