Blockchain

TSXV:HIVE

In its Q1 2019 results, issued on Wednesday, HIVE Blockchain said its mining of ethereum increased 179 percent from the previous quarter.

Crypto-mining giant HIVE Blockchain (TSXV:HIVE) released its Q1 2019 results on Wednesday (August 29), highlighting its mining of ethereum increased substantially during the quarter.

According to the company’ press release, 17,555 ethereum were mined in Q1, which is a 179 percent increase from the previous quarter’s 9,800 mined ethereum.

In a conference call with investors on Thursday (August 30), Harry Pokrandt, CEO of HIVE, said the company has been able to continue adding mining capacity to its network, which has resulted in the mining increase.

At the company’s Sweden facility, 6.8 megawatts (MW) of capacity were added, which Pokrandt said increased total capacity to 24.2 (MW).

“The scale of this property is tremendous,” Pokrandt said on the call. “This site gives us a large opportunity to develop at … both a scale and a pace that we want.”

Pokrandt also highlighted the 200 petahash (PH) cloud-based ASIC agreement, which he said the company is getting 200 PH of bitcoin production through a cloud contract instead of taking a delivery in a “specific location.” According to Pokrandt, the company has up to a year to take delivery at a site of the company’s choice.

“The economics of the cloud contract are at least equivalent to taking delivery in Sweden, however we have the flexibility to assess other regions–both in terms of cost and risk,” Pokrandt said, noting that North America is on the company’s radar.

He added that the company’s decision to look in the region is not a reflection of its current facilities’ operating profiles, stating HIVE “continues to benefit from low-cost power, high-speed internet and cool climates.” When looking for other facilities, Pokrandt explained that those are characteristics the company will conitnually strive looking for.

“This will bring our equivalent mining capacity up to 44 MW in September, as promised,” Pokrandt said. “We continue to assess areas that provide us with the greatest return on investments for our investors.”

In terms of the company’s financials for the quarter, HIVE raked in US$10.6 million with a gross minin margin1 of US$6.4 million from mining digital currencies. HIVE’s gross minining margin totaled 60 percent, with its mining digital income reaching US$485,000 per avearage MW.

In its Q1 income from digital currency mining, revenue came from an average of 21.98 MW of production capacity thanks to the Sweden Phase 3 coming to fruition in April. Thanks to the Swedish facility, HIVE’s total capacity increaesed to 24.2 MW as of June 30, 2018.

Since its operations launched in September 2017, the company has generated US$23.74 million in earned income from digital mining on the heels of US$82.2 million in capital.

The company also noted in the financial results a change to its management. Effective on Friday (August 31), Pokrandt will retire from his role as HIVE’s president and CEO. Frank Holmes, who acts as the company’s chairman, will step in as interim executive chairman and Olivier Roussy Netwon will assume the role as interim president.

HIVE’s board of directors is currently searching for a new CEO to bring the ocmpany to the next stage of its development.

Pokrandt has been the company’s leader ever since June 2017, overlooking the C$200 million in financing raised and securing its 44.2 MW of digital curency mining capacity.

Holmes said on Thursday’s conference call that, looking ahead, the company has a number of pipeline projects underway.

“We believe that we’re well-positioned as early pioneers in blockchain and management is well-aligned with shareholders,” he said. “We continue to make progress on our strategic plan to remain at the forefront of the blockchain industry.”

Following the company’s financial results and conference call, shares of HIVE dipped 10.47 percent to close the trading session at C$0.77.

The company currently has a “Moderate Buy” ranking with a price taret of C$3.97 on TipRanks based off one analyst rating. On TradingView, HIVE’s shares are currently ranked as a “Sell” with 13 against, nine “Neutral” and four in favor.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

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