Phoenix
Group, the first UAE-listed cryptocurrency mining company, reported mixed
financial results for 2024, with strong mining revenue growth contrasting
against an overall decline in total revenue and profitability.
UAE Bitcoin Miner Sees
Mixed Results
While the
company’s mining revenue surged 236% to $107 million, total revenue fell almost 30% to
$205.7 million from $288.2 million in 2023. Net profit attributable to
shareholders declined to $167.4 million from $207.8 million, with earnings per
share dropping to $0.028 from $0.040 the previous year.
However, the company claims that its net result would have been higher, reaching $193 million (a 7% year-over-year decline), if not for “multiple one-off transactions” in Q4 2024. These included costs related to the company’s exit from the CIS region.
Despite
these headwinds, Phoenix Group maintained its expansion strategy, with CEO
Munaf Ali expressing optimism: “The past year has been pivotal for Phoenix
Group, marked by significant expansion and enhanced profitability.”
However,
the financial statements tell a more complex story, with EBITDA declining to
$190.7 million from $208.6 million in 2023.
The
company’s total assets grew modestly to $962.4 million from $834 million, while
shareholders’ equity increased to $891.8 million from $697.1 million. Phoenix
Group maintained its Bitcoin network presence with 15.0 EH/s of computing
power, representing a 1.90% market share.
$370M IPO
A year ago,
Finance Magnates reported that the Abu Dhabi stock market (ADX) welcomed
its first publicly listed Bitcoin mining company, a business that has been
extremely popular in countries like the U.S. Following
its IPO, which raised $370 million, the company released a financial report
showing a threefold decrease in revenue compared to the previous year. Despite
this decline, the company significantly increased its asset holdings.
Net profit,
however, rose sharply despite falling revenues, which was achieved due to a
“one-time contract” that distorted the company’s expected cash flows.
However, the
report did not sit well with shareholders last year, as the company’s stock
fell 20% since its debut, and it remains unpopular now.
Almost a Penny Stock
The
company’s stock performance has been particularly challenging since its late
2023 debut on the ADX. The shares have plummeted approximately 60% from their
all-time high, currently trading at AED 1.01 ($0.27), bringing the company
perilously close to penny stock territory.
The fourth
quarter showed some operational improvements, with self-mining gross margins
expanding to 24% from 5% in the previous quarter, benefiting from Bitcoin’s
price appreciation and efficiency gains in North American facilities.
Looking
ahead, the company has secured agreements for additional facilities in Ethiopia
and Texas while also diversifying into various cryptocurrencies and partnering
with the Tether Foundation for a dirham-backed stablecoin initiative.
This article was written by Damian Chmiel at www.financemagnates.com.
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