A few days back, the crypto and investing media went abuzz with the news of dismal Q4 performance of Bitfarms because of which it is getting delisted from Tel Aviv Stock Exchange. While this news sounded a bit harsh, Coingape got in touch which Bahador Zabihiyan, Director of Public and Government Relations at Bitfarms, who explained the delisting from Tel Aviv Exchange is a conscious and strategic move by the management and it has nothing to do with the company’s financial results.
Depreciation is the reason for Net Loss reported by Bitfarms
Bitfarms is a Canadian crypto miner which envisions to develop the ecosystem growing around blockchain-based technologies. It is the first public company in the blockchain operation and crypto mining world. A couple of days back, Bitfarms released its results for Q4 2018 which on the face of it looked quite dismal. The announcement said
- Consolidated revenue of $33.8 million; gross profit of $10.9 million (32% gross profit margin), operating loss of $18.0 million, EBITDA1 loss of $5.5 million and a net loss of $18.2 million;
- Impairment of property plant and equipment and intangible assets of $19.1 million;
Bitfarms’s Bahador Zabihiyan told CoinGape that the numbers look really poor because the reported depreciation, as the value of the company’s miners, has depreciated significantly as the price of bitcoin has declined over the past 12-18 month. Comparing it to a year back in Q4 2017, company’s S9s were around 2000$-3000$ each and today they are around 200$ each. If calculated backward, Bitfarms is still profitable on a gross mining and gross profit basis.
Irrespective of the result, the Tel Aviv delisting was a strategic move that the company had planned.
According to Mr. Zabihiyan, most of the media had got it wrong and considered the delisting as a disciplinary or corrective action. He also mentioned that Bitfarms had publicly announced a proposed arrangement with a newly created Canadian company which, if effected, would see Bitfarms migrate its Israel listing to Canada. This decision was subject to shareholder, court and regulatory approvals. If the proposed arrangement is not successful, Bitfarms will maintain its status as a TASE publicly traded company.
In words of Bahador,
“we are not being delisted from Tel Aviv. We are not being delisted from the Tel Aviv Stock Exchange «due» to losses. We have publicly announced a proposed arrangement with a newly created Canadian company which, if effected, would see Bitfarms migrate its Israel listing to Canada. It’s subject to shareholder, court and regulatory approvals. If the proposed arrangement is not successful, Bitfarms will maintain its status as a TASE publicly traded company”
He further added
“We are currently building a new bitcoin mine in the city of Sherbrooke, Québec, and the municipality will use the profits of electricity sales to Bitfarms to pay off its municipal debt. A resolution in that sense was passed at the city hall recently.”
While this conversation with the management brings in more clarity of what is actually happening at Bitfarms and looks like the management has really tightened up its socks to perform well irrespective of the mighty collapse in the crypto market in 2018.
What is your view on Bitfarm and its strategies as a crypto miner? Do let us know your views on the same.