Bitfarms Deepens 2022 Loss Despite More Bitcoins Mined

Bitfarms (NASDAQ:BITF), a cryptocurrency mining company, recently reported its financials for the three months that ended 30 September 2022. Despite higher bitcoin (BTC) production, the company showed a decline in revenue and deepened its net loss for the entire 2022.

According to the press release, revenue stood at $33.2 million, falling from $44.8 million reported in the same period a year earlier. The net loss and total comprehensive loss recorded $84.8 million, while in Q3 2021, Bitfarms achieved a healthy net income of $23.7 million. Year-to-date, the company’s loss broadened to $222.2 million.

The sharply falling cryptocurrency prices are the main reason for the worsening condition of the firm. The results were partially offset by an increase in Bitfarm’s hashrate, which rose by 17% Quarter-over-Quarter (QoQ) and 180% Year-over-Year (Yoy) to 4.2 exahash per second (EH/s).

Thanks to the rising computing power, the company could mine 1,515 BTC during the third quarter, compared to 1,050 in the same period a year earlier. The total amount of mined BTC during 2022 stood at 3,733, which is 1,326 higher than in the first nine months of 2021.

“For the second year in a row, Bitfarms is on pace to be one of the largest known producers of Bitcoin. Consistently one of the reported lowest cost producers, during Q3 2022, we reduced our direct cost of production by 5% to $9,400 per BTC compared to Q2 2022. In addition, we drove greater efficiencies and discretionary reductions in cash G&A that contributed to further savings, and our total cash costs of production declined 16% to $14,300 per BTC from Q2 2022,” Geoff Morphy, the President and COO at Bitfarms, commented.

“As such, even with recent BTC pricing, we continue to generate positive cash flow from operations and posted $10 million in Adjusted EBITDA.”

Crypto Mining Industry Feeling the Financial Pain

Publicly-listed digital assets mining firms have entered the earnings season for the previous quarter, but the outcomes show the negative effects of the prolonged ‘cryptocurrency winter’ and sharp decline in bitcoin (BTC) prices. Due to the lowering of mining profitability, miners are forced to sell their crypto supplies to finance day-to-day operations.

HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) reported a 45% decline in revenues yesterday to $29.6 million. A week earlier, Hut 8 Mining Corp. (NASDAQ:HUT) also showed a significantly lower revenue of CAD 18.6 million, falling from CAD 50.3 million reported in the same period a year earlier.

Canaan Inc. (NASDAQ:CAN) was another publicly-held company that recorded worsening financial numbers. During the three-month period that ended on 30 September 2022, its revenue slumped 40% to $137.5 million.