Hut 8 data processing says it weathered the “cryptowinter” that saw the highly volatile value of bitcoin plummet in 2018, and positioned itself to benefit as the price improves.
The cryptocurrency miner commissioned its main facility in Medicine Hat midway through 2018 and recorded C$49.4 million in revenue in the last fiscal year, according to year-end results released Monday. That translates to an adjusted earning before tax and depreciation of $19.3 million.
Since Hut 8 earns income in bitcoin, it traded more than expected to meet expenses, a release states, and also recorded substantial write-downs on its plant and bitcoin holdings.
The trading price in Canadian dollars of the cryptocurrency saw a tremendous 2,500 per cent spike in late 2017 before cresting at about $18,500.
Following a long, steep decline, it ended 2018 at about $4,200, but has since risen to about $5,200.
“Throughout 2018, Hut 8’s average cost per bitcoin was consistently below the market price of bitcoin,” said Andrew Kiguel, the chief operating officer of Hut 8. “As we move into 2019, we are poised to improve margins should the price of bitcoin continues to rise, given our cost cutting initiatives undertaken in late 2018.”
The company also confirmed that layoffs took place at the company’s Alberta facilities in January and April 2019.
The release states that acceptance of the virtual currency is growing and recent price recovery will benefit the company.
Midway through the fiscal year the company completed its “flagship” data processing centre in Medicine Hat and increased operations about 10-fold.
The earnings release further states that the firm enjoys a positive relationship with its key partner, chipmaker Bitfury, as well as the City of Medicine Hat, which supplies electricity to the power-intensive operation.
