Hut 8 Mining Corp. (NASDAQ:HUT), a digital asset mining company from North America, reported its quarterly numbers on Thursday. During the three-month period that ended on 30 September 2022, one of the largest mining firms achieved revenue of CAD 31.7 million and mined 982 bitcoins (BTC).
Althgouh Hut 8 was able to mine more digital assets than in the same period last year, the revenue decreased by CAD 18.6 million compared to CAD 50.3 million for Q3 2021. The company reported a net loss of CAD 23.78 million, declining from a neto profit of CAD 23.37 million a year ago.
Looking at results for the nine months closed on 30 September 2022, Hut 8 mined 2,870 BTC, which is 997 more than a year earlier. Although revenues for the period turned out to be higher, at CAD 128.85 million, the company has lost a net CAD 56.15 million year-to-date, compared to a CAD 38.47 million profit reported a year ago.
"Our conservative approach to managing our balance sheet continues to be paramount for us at Hut 8. Notably, we improved our mining capacity by 10% while reducing the average cost to mine each Bitcoin by 29%, when compared to the second quarter of 2022. We remain steadfastly committed to effectively managing capital in today's challenging environment and believe we are well positioned to deliver shareholder value in 2023 and beyond," Shane Downey, the CFO of Hut 8, said.
According to the company press release, the increase in the number of mined BTCs was achieved due to the higher than average hash rate. However, declining profitability of mining operations, rising energy prices and lowering bitcoin prices have left the company unprofitable in 2022. Profits from mining operations alone fell to CAD 9.3 million in Q3, compared to CAD 33.5 million reported a year earlier.
Cryptocurrency Miners in Trouble
Hut 8's stock is losing nearly 80% on Wall Street this year and is an excellent representation of the industry's current condition. Competing miners listed on the stock exchange, like Riot Blockchain Inc. (RIOT), Canaan Inc. (CAN) and HIVE Blockchain Technologies Ltd. (HIVE), are falling in similar percentages.
On the one hand, their stocks guarantee indirect exposure to cryptocurrencies for many investors. So when bitcoin falls, their shares also slide. On the other hand, the fundamentally poor condition of the industry as a whole and low yields from mining digital assets make it very difficult to generate profits during the 'cryptocurrency winter'.
According to data from on-chain analytics firm, Glassnode, miners' revenue per Exahash stands at its lowest levels to date. This further shows how competitive the cryptocurrency mining industry has become in recent years.
