Hive Blockchain Tech (TSXV: HIVE) last night filed its second quarter financial results, reporting revenues of $13.0 million from its digital currency mining, a 97.4% increase over the first quarter revenues of $6.6 million posted by the company. Furthermore, Hive managed to post a net income of $9.3 million, a strong improvement over the $1.3 million posted in the prior quarter.
The impressive rise in income is said to be the result of the rising price of Ethereum, combined with the continued focus on cost reduction by the company. Hive has also focused on continued expansion in mining capacity, further driving revenue growth. The company mined 32,800 Ethereum and 88,300 Ethereum Classic coins throughout the quarter.
Impressively, despite the near doubling of revenues during the quarter, operating and maintenance costs, which is included within the firms cost of digital currency mining, was actually down on a quarter over quarter basis from $4.0 million to $3.8 million. Depreciation however was up, from $1.6 million to $1.8 million, resulting in a gross margin of $7.4 million before any revaluation of digital currencies.
Expenses meanwhile were down, declining from $1.1 million to $1.0 million over the three month period ended September 30, 2020. Share based compensation was the largest expense at $0.5 million, followed by foreign exchange losses of $0.3 million. General and administrative expenses were down considerably, falling from $0.9 million in the first quarter to just $0.2 million in the second quarter.
Combined with finance expenses of $0.1 million, and a positive translation adjustment of $0.1 million, the company posted a net income of $9.3 million for the three month period.
Looking to the balance sheet, Hive Blockchain saw its cash position grow from $1.2 million to that of $5.8 million, a result of being operationally cash flow positive – a rarity in the Canadian small cap sector. Accounts receivable and prepaids meanwhile rise from $12.5 million to $13.8 million, while digital currency holdings rose from $6.5 million to $10.7 million. Overall, total current assets climbed from $20.3 million to $30.3 million.
Accounts payable and accrued liabilities meanwhile declined, falling from $4.2 million to $3.4 million. This was offset by the current portion of lease liabilities climbing however, which were up from $2.0 million to $2.6 million. Total current liabilities overall declined marginally from $9.6 million to $9.5 million.
Hive Blockchain last traded at $1.25 on the TSX Venture.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.