Mining company Hut 8 reported earnings for the third quarter of 2019

Mining company Hut 8 reported earnings for the third quarter of 2019

According to a report from canadian mining company Hut 8, the firm earned $26.7 million in the third quarter of 2019. Net of interest, taxes, depreciation and amortisation, the company’s profit was $14.7 million.

Hut 8 managed to extract 1,965 BTC, the cost of which, taking into account electricity payments, pool fees and other production costs, was about $8.6 million ($4,363 per BTC).

Analysts of Ceteris Paribus analyzed the report in detail and noted that the figures presented do not include a number of important items of expenditure that significantly increase the cost of one BTC. According to them, if you take into account depreciation, land lease and other expenses, the cost of mining one BTC increases to $7,100, which corresponds to the current rate of the first cryptocurrency.

“If the price of bitcoin is below $7,100 in the near future, they will be able to remain profitable due to the expenses of the previous period. In the report for 2018, they indicated funds spent on mining equipment in the amount of $85 million. That’s why depreciation costs are so low this year. They also did not add costs for infrastructure or mining servers, since their operational life is two years,” the analysts said.

However, in the long run, Hut 8, like other mining companies, will need to change equipment and incur additional costs. Because of this, the profitability of the business, if the value of bitcoin is below $5,000 and the current competition, becomes negative.

In October, Hut 8 received permission to list securities on the Toronto Stock exchange. This may explain the specifics of current reporting, as the company wants to be the most attractive to potential investors.