Canaan Reports $5.6M Loss in Q1 Despite Bitcoin Miner Price Cut

China-based bitcoin miner producer Canaan has reported a web lack of $5.6 million for Q1 2020, though it had lower down the costs for its {hardware} by greater than half in an effort to promote extra machines.

In an earnings report launched on Friday, the agency mentioned it made $9.four million in income for the primary three months this yr with a development of 44.6% in comparison with the identical interval final yr. But it surely additionally incurred $9.three million and $5.9 million bills in price of products offered and R&D, respectively.

For that income, Canaan offered 0.9 million terahashes per second (TH/s) of Bitcoin computing energy, which accounts for lower than 1% of the community’s present whole.

Which means Canaan had lower down the costs for its mining {hardware} offered within the first three months by greater than 50% to simply $10 per TH/s, reflecting an general slowdown of the shopping for curiosity into mining {hardware} amid Bitcoin’s halving occasion and the COVID-19 pandemic that has disrupted international logistics.

For context, Canaan booked a income of $66.5 million in 2019 with 2.9 million TH/s of Bitcoin computing energy offered, which means the common costs was round $22 per TH/s final yr. Different main producers have additionally taken an identical value lower technique over the previous just a few months.

“The general market state of affairs since December final yr till January had not been too good. So the unit value per TH/s was certainly decrease,” Zhang Nangeng, CEO and chairman of Canaan, mentioned in an incomes name on Friday. “And the logistics in mainland China had mainly stopped across the Chinese language new yr because of the COVID-19 pandemic. So though bitcoin’s value was the next level in February and early March, the pandemic largely affected our gross sales.”

The submitting additionally reveals that as of March 31, Canaan had money and money equivalents of $37 million, in comparison with $71 million as of the top of final yr.

“The lower was primarily as a consequence of greater short-term investments because the Firm invested RMB173.four million (US$24.5 million) in short-term investments as of March 31, 2020,” Canaan mentioned within the report.

Zhang mentioned the agency has partnered China-based Semiconductor Manufacturing Worldwide Company – along with its current provide chain partnership with Samsung and TSMC – to roll out bitcoin mining tools with 14-nm chips and expects to have the ability to ship in bigger amount in Q2.

However the agency declines to subject a enterprise outlook for Q2 2020 citing the uncertainty of the COVID-19 pandemic and the uncertainties after Bitcoin’s halving provides itself “very restricted visibility on the potential impacts to its enterprise and the markets wherein it operates.”