Canadian miner Hut 8 Mining Corp has reported that second quarter revenue tumbled 67% to $6.9 million from $21.2 million a year ago, as Bitcoin’s supply cut in May forced production to decline.
The Toronto Stock Exchange-listed company extracted just 795 bitcoin (BTC) in the April to June quarter, compared to 1,165 BTC in the preceding three-month period.
However, Hut 8 posted a net profit of $2.1 million thanks to the revaluation of its bitcoin holdings, which generated $7.6 million.
Still, Q2 net earnings show a decline of 91% from the $22.7 million reported a year earlier. The firm said profit from mining activities came in at $440,000, down from $13.4 million the year before.
Altogether, Hut 8 ended the review quarter with 2,954 BTC on its balance sheet.
Management blamed the decline in profits to the Bitcoin third halving event of May 11, which slashed miner rewards by 50% to 6.25 BTC per block.
“The network difficulty decreased subsequent to the halving by 15%, but quickly returned back to levels prior to the halving,” said the company, in its earnings release on August 13.
“This posed a difficult challenge to many bitcoin miners as they saw the bitcoin block reward drop by 50% with similar network difficulty rates meaning that revenue dropped by nearly 50% for all bitcoin miners, including Hut 8,” it added.
During the quarter, Hut 8 raised $6.2 million from a share sale. The funds have been used to buy new mining hardware, which is expected to add 275 petahash per second to the company’s existing mining capacity.
Shares of Hut 8 rose 4.4% to $0.89 in Toronto trading Friday. Over the past 52 weeks, the stock has reached a low of $0.38 and a high of $1.98.
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