Hut 8 Mining (TSX: HUT) is beginning to feel the impact of the weak crypto market. The company this morning reported its third quarter financial results, posting declining revenue despite mining more bitcoin on a quarter over quarter basis.
Revenues for Hut 8 declined for the third quarter in a row for the period ended September 30, posting Q3 revenues of just $31.7 million, versus $43.8 million in the second quarter and $50.3 million in the year ago period. 982 bitcoin were mined during the month, an improvement over the 946 mined in the second quarter.
Bitcoin mining during the quarter attributed $27.3 million in revenue during the quarter, while $4.4 million came from the firms high performance computing operations.
Hut 8 is set to face continued problems in the fourth quarter as bitcoin prices continue to soften and power costs continue to rise. The average cost of mining each bitcoin hit C$18,300 during the quarter, while as of the time of writing, bitcoin is currently trading at C$23,479, meaning that currently the company is moving closer to losing money on each coin mined.
As it stands currently, the company is already facing losses due to depreciation expenses related to its equipment. Revenues of $31.7 million for the quarter were offset by costs of revenue of $45.6 million, resulting in a gross loss of $13.9 million. General and administrative expenses of $11.2 million added to losses, resulting in an operating loss of $25.2 million.
After other expenses and a subsequent gain on revaluation of digital assets, the company posted a net loss of $23.8 million for the quarter. Adjusted EBITDA meanwhile was said to come in at $2.1 million.
In terms of its balance sheet, the firm saw its cash position decline from $60.1 million to $33.0 million, while total assets fell from $572.9 million to $561.9 million. Total liabilities increased from $63.6 million to $67.1 million.
Finally, the company also revealed this morning that it is having challenges with its power provider in North Bay, Ontario. The company has reportedly issued a notice of default to its energy provider for failing to hit certain operational milestones, while the provider, Validus Power, is reportedly charging for power at a higher than agreed to rate. The company is said to be currently looking for an alternative energy supplier for the location.
Hut 8 Mining last traded at $2.34 on the TSX.
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