Bitfarms recorded a net loss of USD 3.7 million in the second quarter of the year. The company is installing more miners and expanding power generation.
In the second quarter of 2020 and the first half of the year, Canada-based Bitcoin mining company Bitfarms reported millions in losses. Its most recent financial report, which it released on August 28th, shows the negative numbers.
The balance reflects a net loss of USD 3.7 million in the second quarter of 2020 and a net decrease of USD 6.1 million in the first six months of the year. The first figure is almost triple that of the second quarter of last year when it stood at USD 1.3 million. In other words, the gap increased by 183% or USD 2.4 million in one year.
The semi-annual register also shows “red” numbers with an increase of 85% compared to the balance of the first semester of 2019, when the losses stood at USD 3.3 million. The company reported a decrease in general and administrative expenses that would be associated with the dismissal of personnel that occurred in April.
Despite the net losses, the company seems to be betting on Bitcoin for the long term, since it announced the purchase and installation of new miners and greater infrastructure for electricity generation. Besides, it revealed positive figures in terms of Bitcoin mining.
In the second quarter of the year, Bitfarms mined 815 BTC at an average price of USD 5,075 per unit. It also announced in July the acquisition and installation of 1,865 WhatsMiner M20S equipment with a capacity of 135 PH/s. It even made investments to increase the electricity generation capacity at its plant in Saint Hyacinthe, which would go from 10 megawatts (MW) to 15 megawatts.
Concerning direct Bitcoin mining operations, Bitfarms stated that gross mining profits amounted to USD 2.5 million. However, the figure is 51% lower than the one recorded in the second quarter of 2019, when they stood at USD 5.1 million. In other words, there is evidence of a drop of USD 2.6 million.
Even though the losses have increased compared to last year, Bitfarms said that it has identified the problems that led to the negative numbers, but that it is “satisfied with its business model.”
Four months ago, Bitfarms reduced its workforce due to the effects of COVID-19. Although the measure was temporary, nobody knows if they already reversed it or if they will do it in the coming months.
Other factors that may have contributed to the losses are the market volatility due to the pandemic and the Bitcoin halving that occurred in May, said John Rim, Bitfarms CFO, and COO.
The widespread quarantine and the COVID-19 pandemic have affected several companies in the Bitcoin ecosystem. In recent weeks, analysts reported that 2020 had become the most challenging year for mining.
The spread of the COVID-19 disease has also influenced the global manufacturing and distribution of ASIC miners, whose deliveries have experienced delays.
By Alexander Salazar
