The first cryptocurrency mining enterprise listed on the UAE stock exchange has encountered fluctuating financial outcomes for 2024. On one hand, there was a remarkable increase in mining revenue, while total revenue and overall profitability experienced a downturn.
The mining revenue skyrocketed by 236%, reaching $107 million, in contrast to a nearly 30% drop in total revenue, decreasing from $288.2 million in 2023 to $205.7 million. Consequently, net profit attributable to shareholders slipped to $167.4 million from $207.8 million, and earnings per share saw a reduction from $0.040 to $0.028.
Despite facing these challenges, the organization has persisted with expansion efforts, with leadership expressing optimism about the previous year being crucial for growth and improved profitability. Nonetheless, the financial statements reveal a more intricate scenario, highlighting a decline in EBITDA from $208.6 million to $190.7 million year-over-year.
The company’s asset portfolio showed a slight increase, rising from $834 million to $962.4 million, alongside a commendable rise in shareholders’ equity from $697.1 million to $891.8 million. The enterprise possesses a network capacity of 15.0 EH/s of computing power, accounting for a 1.90% share of the Bitcoin mining market.
One year earlier, the Abu Dhabi stock market marked a milestone by introducing its inaugural publicly listed Bitcoin mining firm. This sector has seen considerable popularity in various global markets, particularly in the United States. Following an initial public offering (IPO) that garnered $370 million, the enterprise reported a stark decline in revenue, plummeting to one-third of the previous year’s figures. However, the increase in asset holdings was notable.
Despite the drop in revenues, net profit witnessed a significant rise, attributed to an exceptional contract which altered anticipated cash flows. Shareholders, however, were dissatisfied with this report, observing a 20% decrease in stock value since the company’s market introduction, leading to ongoing unpopularity.
Since the late 2023 debut, the firm’s stock has experienced a severe downturn, declining approximately 60% from its peak valuation. Current trading rates sit at AED 1.01 ($0.27), which places the stock precariously close to penny stock classification.
The fourth quarter has indicated some operational advancements, with gross margins from self-mining improving to 24%, an increase from the previous quarter’s figure of 5%. This positive shift can be largely attributed to rising Bitcoin prices and efficiency enhancements in facilities located in North America.
Looking to the future, plans are in place to establish additional operational sites in Ethiopia and Texas. At the same time, the organization is diversifying its cryptocurrency offerings and has formed a partnership with the Tether Foundation aimed at developing a dirham-backed stablecoin. Stablecoins differentiate themselves from varying cryptocurrencies like Bitcoin and Ethereum by emphasizing value stability, which appeals to investors who may shy away from the volatility commonly associated with crypto-assets.
In summary, while there have been successes, particularly in those areas related to mining revenue, the overall financial picture presents a mix of challenges and opportunities. The organization’s capacity to navigate these financial complexities while maintaining its growth ambitions will be pivotal in its future endeavors. As it explores new ventures and partnerships, its performance in the cryptocurrency mining landscape remains to be seen, particularly given the market’s inherent volatility and evolving nature.