Argo H1 2020 report shows growth despite May’s Bitcoin halving

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U.K.-based block reward miner Argo Blockchain Plc (LSE: ARB) is mining 545% more BTC than in 2019, with profits up 280%. The London Stock Exchange-listed company published the surprising mid-year results for 2020, which included a 39% mining margin, against the backdrop of COVID-19 and BTC’s failure to stay above the $12,000 price mark.

For the six months through to June 30, the firm’s revenues hit $14.48 million, up from the $3.79 million reported over the same during 2019. The surge in revenue owes to a “major ramp-up in production,” according to the company. The total number of BTC mined during the first of the year reached 1,669, up from 306 BTC in H1 2019, with pre-tax profits coming in at roughly $670,000. 

Argo CEO Peter Wall was quoted by Cointelegraph saying that over the past year, Argo had strategically “focused on investing in new mining gear, and running that gear as efficiently as possible.” Argo’s report reveals it added roughly 11,000 new ASIC machines in the first three months of the year, expanding its overall production base by 260% to 18,000 digital currency mining machines with combined a 730 petahash.

This expansion helped to fortify the company’s balance sheet despite the May reduction in the block subsidy reward and volatile price market for digital currencies. When recapping the chaotic first half of the year, Argo’s management noted that the halving resulted in more significant pressure on inefficient block reward miners and affected block mining difficulty rates. It expects both hashrate and mining difficulty to continue to rise through the second half of this year, as newer ASIC hardware rigs come online.

With this in mind, Argo also continued branching out into the altcoin market. The firm purchased an additional 750 machines using the Equihash algorithm to mine Zcash (ZEC). This capacity increase brings its total number of Zcash miners in operations to 1,750. 

Argo’s report notes well-known quality issues adversely affected that with the Bitmain T17 miners with affected the miner’s uptime and efficiency. They are reported to be in discussions with Bitmain to address the fallout from this situation. More surprising is there assertion that the global pandemic, which has caused operation and supply chain challenges for their peers, apparently has “not affected our operations to date.”

Ian MacLeod, Executive Chairman of Argo, notes that, “Despite these challenges, the Group entered the second half of 2020 in a robust financial position and with a solid mining base.”