Achieves record-breaking annual revenue of
$173.8 million
Increases Bitcoin holdings 100% in 2021 to
5,518
2021 Adjusted EBITDA increased to $96.6 million
TORONTO, March 17, 2022 /CNW/ - Hut 8 Mining Corp.
(Nasdaq: HUT) (TSX: HUT) ("Hut 8" or the "Company"), one of
North America's largest,
innovation-focused digital asset mining pioneers, supporting open
and decentralized systems since 2018, is pleased to announce its
financial results for the year ended December 31, 2021. All dollar figures are in
Canadian Dollars ("CAD"), unless otherwise stated.
"2021 was truly a transformational year at Hut 8, complemented
by considerable growth," said Jaime
Leverton, CEO of Hut 8. "In pursuing a diversified strategy,
we have differentiated ourselves from our peer group and in doing
so, have become the only company in North
America to both mine digital assets while building on our
traditional infrastructure business to support companies in Web 3.0
and the Metaverse."
"Achieving sizable improvement across key financial and
operating metrics in fiscal 2021, we delivered record breaking
results for our shareholders," said Shane
Downey, CFO of Hut 8. "We continue to have one of the
largest self-mined Bitcoin reserves in the world, currently holding
more than 6,200 Bitcoin, and look forward to driving operating
efficiencies at our mining sites by deploying next-generation
miners."
2021 HIGHLIGHTS
- Record-breaking revenue of $173.8
million during the year ended December 31, 2021, with our self-mining
operations generating $165.4 million
of revenue and our expanded hosting service generating $8.4 million. We mined 2,786 Bitcoin in 2021.
- The Company was the first Canadian digital asset miner to list
its common shares on the Nasdaq stock exchange ("Nasdaq"), on
June 15, 2021.
- On December 3, 2021, Hut 8 was
the first in its industry to be added to the S&P TSX index.
- The Company purchased an aggregate of 31,912 MicroBT
Whatsminers throughout 2021, including M30S, M30S+, M30S++, and
M31S+ miners. We expect that the approximately 10,000 miners not
yet received will be shipped in regular intervals throughout
2022.
- On December 30, 2021, the Company
entered into a $38.3 million
(US$30 million) senior secured
equipment financing term loan with Trinity Capital Inc ("Trinity").
The equipment financing provides the Company with non-dilutive
growth capital and was structured such that collateral support is
limited to certain new MicroBT machines being installed at the
Company's Medicine Hat, Alberta
and North Bay, Ontario sites.
HASHRATE UPDATE
On December 31, 2021, Hut 8 had
an installed hashrate of approximately
2.0 EH/s, which includes the converted hashrate from our fleet
of NVIDIA GPUs. The hashrate increased to 2.5 EH/s by February 28, 2022.
The Company's current capacity stands at approximately 3.55 EH/s
once all the ordered miners are received and deployed, which
includes the converted hashrate from our fleet of NVIDIA GPUs.
BITCOIN INVENTORY AND VALUE
As of December 31, 2021, the
Company had a total Bitcoin balance of 5,518 with a market value of
$323.9 million, including 2,000
Bitcoin loaned as part of the Company's fiat yield strategy. Hut 8
continues to strategically emphasize its "HODL" strategy, taking
active steps to generate Canadian and US dollars to help fund
operating expenses, while avoiding selling Bitcoin. During Q4-2021,
100% of self-mined Bitcoin was deposited into custody.
OPERATING AND FINANCIAL OVERVIEW
For the periods
ended December 31
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(CAD thousands,
except per share amounts)
|
2021
|
2020
|
|
2021
|
2020
|
Operating
results
|
|
|
|
|
|
Digital assets
mined
|
789
|
516
|
|
2,786
|
2,798
|
|
|
|
|
|
|
Financial
results
|
|
|
|
|
|
Total
revenue
|
$
57,901
|
$
12,986
|
|
$
173,774
|
$
40,711
|
Net (loss)
income
|
(111,178)
|
27,330
|
|
(72,710)
|
19,040
|
Mining profit
(i)
|
39,146
|
1,314
|
|
108,127
|
984
|
Adjusted EBITDA
(i)
|
35,264
|
1,618
|
|
96,593
|
(206)
|
|
|
|
|
|
|
Earnings Per
Share
|
|
|
|
|
|
Net income -
basic
|
$ (0.67)
|
$ 0.28
|
|
$ (0.54)
|
$ 0.20
|
Net income -
diluted
|
$ (0.67)
|
$ 0.28
|
|
$ (0.54)
|
$ 0.20
|
(i) Non-IFRS measure
- see "Non-IFRS Measures" section below. Certain comparative
figures have been restated where necessary to conform with current
period presentation.
|
|
|
|
|
|
As
At
|
(CAD
thousands)
|
|
|
|
December 31,
2021
|
December 31,
2020
|
Financial
position
|
|
|
|
|
|
Cash
|
|
|
|
$
140,127
|
$
2,816
|
Total digital
assets
|
|
|
|
$
323,946
|
$
101,962
|
Total
assets
|
|
|
|
$
720,709
|
$
145,202
|
Total
liabilities
|
|
|
|
$
154,741
|
$
29,647
|
Total shareholder's
equity
|
|
|
|
$
565,967
|
$
115,555
|
|
|
|
|
|
|
|
- Revenue for the year-ended December 31,
2021 was $173.8 million
compared to $40.7 million in the
prior year. The 327% increase was primarily driven by the Company's
digital asset mining operations, where the Company mined 2,786
Bitcoin and generated $165.4 million
of revenue, versus 2,798 Bitcoin mined and $39.0 million of revenue in the prior year. The
Company maintained its Bitcoin mining capacity despite the
significant year-over-year increase in Bitcoin network difficulty,
by deploying additional higher efficiency miners during 2021
compared to 2020. Bitcoin price appreciation resulted in average
revenue per Bitcoin mined of $59,367
for 2021 compared to average revenue per Bitcoin mined of
$13,925 in 2020. The Company's
hosting services contributed $8.4
million of revenue during the year compared to $1.7 million in the prior year.
- Cost of revenue consists of site operating costs and
depreciation and was $85.0 million
for the year ended December 31, 2021,
compared to $59.2 million in the
period year. The average site operating costs of mining each
Bitcoin for 2021 was approximately $22,100, compared to approximately $13,600 in the prior year period, with the
increase due primarily to the May
2020 "halving" event, as well as increased network
difficulty in the second half of 2021. Depreciation expense
increased to $23.3 million during
2021 compared to $21.3 million in
2020, driven by the increased number of miners deployed during the
year, partially offset by the extension of estimated useful life of
infrastructure assets from 4 years to 10 years.
- Net loss was $72.7 million for
the year ended December 31, 2021,
compared to net income of $19.0
million for the same period in 2020. The change is primarily
due to non-cash revaluation loss on liability warrants of
$114.2 million partially offset by
increased revenue.
- Adjusted EBITDA (a non-IFRS measure) increased by $96.8 million for the year ended December 31, 2021, compared to the same period in
2020. The increase was driven by higher digital asset mining
profit, partially offset by higher general and administrative
expenses incurred to support the growth in the Company's
operations.
- Digital assets consist of Bitcoin, which had a balance of 5,518
Bitcoin and a market value of $323.9
million as of December 31,
2021. This balance consisted of 3,518 Bitcoin held in
custody and 2,000 held under lending arrangements.
- A search for a General Counsel and Corporate Secretary is
underway after Tanya Woods left the
company in March 2022.
NON-IFRS MEASURES
This MD&A makes reference to certain measures that are not
recognized under IFRS and do not have a standardized meaning
prescribed by IFRS. They are therefore not necessarily comparable
to similar measures presented by other companies. The Company uses
non-IFRS measures including "Adjusted EBITDA" and "Mining Profit"
as additional information to complement IFRS measures by providing
further understanding of the Company's results of operations from
Management's perspective.
The following tables reconcile non-IFRS measures used by the
Company to analyze the operational performance of Hut 8, to their
nearest IFRS measure and should be read in conjunction with the
audited annual consolidated statement of operations and
comprehensive income (loss) and audited annual consolidated
statement of cash flows included in the audited annual consolidated
financial statements for the year ended December 31, 2021.
Mining Profit
"Mining profit" represents gross profit (revenue
less cost of revenue), excluding depreciation and revenue and site
operating costs directly attributable to hosting services. Mining
profit shows profitability of the Company's core digital asset
mining operation, without the impact of non-cash depreciation
expense.
The following table reconciles Gross profit (loss) to our
non-IFRS measure, Mining profit:
For the periods
ended December 31
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(CAD
thousands)
|
2021
|
2020
|
|
2021
|
2020
|
Gross profit
(loss)
|
$ 30,567
|
$ (971)
|
|
$ 88,798
|
$ (18,533)
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
Revenue from
hosting
|
(2,352)
|
(1,260)
|
|
(8,376)
|
(1,748)
|
Site operating costs
attributable to hosting
|
1,616
|
-
|
|
4,417
|
-
|
Depreciation and
amortization
|
9,315
|
3,545
|
|
23,288
|
21,265
|
Mining
profit
|
$ 39,146
|
$ 1,314
|
|
$ 108,127
|
$ 984
|
Adjusted EBITDA
"Adjusted EBITDA" represents EBITDA (net income or
loss excluding net finance income or expense, income tax or
recovery, depreciation, and amortization) adjusted to exclude
non-cash share-based compensation, fair value gain or loss on
revaluation of digital assets, non-recurring impairment charges or
reversals of impairment, and costs associated with one-time or
non-recurring transactions. Adjusted EBITDA is used to assess
profitability without the impact of non-cash accounting policies,
capital structure, taxation, and one-time or non-recurring
transactions. This performance measure provides a consistent
comparable metric for profitability of the Company across time
periods.
The following table reconciles net income (loss) to our non-IFRS
measure, Adjusted EBITDA:
For the periods
ended December 31
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(CAD
thousands)
|
2021
|
2020
|
|
2021
|
2020
|
Net income
(loss)
|
$
(111,178)
|
$
27,330
|
|
$
(72,710)
|
$
19,040
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
Net finance
costs
|
(326)
|
532
|
|
(1,498)
|
2,441
|
Depreciation and
amortization
|
9,315
|
3,545
|
|
23,288
|
21,265
|
Share based
payment
|
2,550
|
195
|
|
9,875
|
(284)
|
Revaluation of digital
assets
|
-
|
-
|
|
-
|
(13,714)
|
Reversal of impairment
and other
|
-
|
(13,162)
|
|
-
|
(13,162)
|
Gain on used of
digital assets
|
-
|
(1,014)
|
|
(182)
|
(2,815)
|
Foreign
exchange
|
1,741
|
(1,182)
|
|
3,143
|
(409)
|
Share based payment
taxes withholding
|
-
|
-
|
|
1,246
|
-
|
Sales tax
expense
|
4,892
|
429
|
|
10,694
|
1,945
|
One-time transaction
costs
|
2,033
|
-
|
|
2,956
|
542
|
Deferred income tax
recovery (expense)
|
12,076
|
(15,049)
|
|
5,620
|
(15,049)
|
Loss on revaluation of
warrants
|
114,161
|
-
|
|
114,161
|
-
|
Adjusted
EBITDA
|
$
35,264
|
$
1,618
|
|
$
96,593
|
$
(206)
|
CONFERENCE CALL
Hut 8 Mining Q4 conference call will commence at 10 a.m. ET, today, March
17, 2022. Those wishing to join via telephone should dial in
5 minutes early to the number below:
- In North America:
1-800-774-6070, access code 6185409#
- Outside North America:
1-630-691-2753, access code 6185409#
- A webinar will be available here.
Analyst Coverage of Hut 8 Mining:
A full list of Hut 8 Mining analyst coverage can be found
here.
FORWARD-LOOKING INFORMATION
This press release includes "forward-looking information" and
"forward-looking statements" within the meaning of Canadian
securities laws and United States
securities laws, respectively (collectively, "forward-looking
information"). All information, other than statements of historical
facts, included in this press release that address activities,
events or developments that the Company expects or anticipates will
or may occur in the future, including such things as future
business strategy, competitive strengths, goals, expansion and
growth of the Company's businesses, operations, plans and other
such matters is forward-looking information. Forward-looking
information is often identified by the words "may", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions. In
addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts, but instead represent
management's expectations, estimates and projections regarding
future events. Forward-looking information is necessarily based on
a number of opinions, assumptions and estimates that, while
considered reasonable by Hut 8 as of the date of this press
release, are subject to known and unknown risks, uncertainties,
assumptions and other factors that may cause the actual results,
level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
information, including but not limited to the factors described in
greater detail in the "Risk Factors" section of the Company's
Annual Information Form dated March 17,
2022, which is available on www.sedar.com. These factors are
not intended to represent a complete list of the factors that could
affect Hut 8; however, these factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. The forward-looking
statements contained in this press release are made as of the date
of this press release, and Hut 8 expressly disclaims any obligation
to update or alter statements containing any forward-looking
information, or the factors or assumptions underlying them, whether
as a result of new information, future events or otherwise, except
as required by law.
Neither the Toronto Stock Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Toronto
Stock Exchange) accepts responsibility for the adequacy or accuracy
of this release.
ABOUT HUT 8
Hut 8 is a digital asset mining company with industrial-scale
operations in Alberta, Canada. The
Company is one of North America's
largest innovation-focused digital asset miners, supporting open
and decentralized systems since 2018. Located in energy rich
Alberta, Canada, Hut 8 has one of
the highest installed capacity rates in the industry and one of the
largest holdings of self-mined Bitcoin relative to other digital
asset miners and publicly traded companies globally. Hut 8 is
executing on its strategy of mining and holding Bitcoin, while
building a diversified business and revenue strategy to grow and
protect shareholder value, regardless of Bitcoin price action. The
Company's multi-pronged business strategy includes profitable
digital asset mining, white-label high-performance compute hosting,
as well as yield & income programs leveraging its Bitcoin held
in reserve. Having demonstrated rapid growth and a stellar balance
sheet, Hut 8 was the first publicly traded miner on the TSX and the
first Canadian miner to be listed on The Nasdaq Global Select
Market. Hut 8's team of business building technologists are
believers in decentralized systems, stewards of powerful
industry-leading solutions, and drivers of innovation in digital
asset mining and high-performance computing, with a focus on
Environmental, Social and Governance ("ESG") standards alignment.
Through innovation, imagination, and passion, Hut 8 is helping to
define the digital asset revolution to create value and positive
impacts for its shareholders and generations to come.
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SOURCE Hut 8 Mining Corp