Even though cryptocurrency mining company Canaan announced record mining data in the second quarter, the company’s loss is increasing.
Canaan’s second-quarter Bitcoin mining revenues rose 43.3 percent quarter-on-quarter to a record $15.9 million. However, mining costs of $30.6 million over the same period contributed to the company’s total net loss of $110.7 million.
Cryptocurrency miner Canaan makes losses after record mining data
According to unaudited second-quarter results, Canaan’s Bitcoin mining revenues were higher than in the previous quarter, with more computing power sold in the second quarter. The company generated $15.9 million in revenue, up 105.1 percent year-on-year, driven by the recovery in Bitcoin’s price and increased computing power and rewards. It also recorded an increase of 43.3 percent in the second quarter compared to the first quarter. The company sold 6.1 million Thash/s worth of computing power, an increase of 11.7 percent compared to the second quarter of 2022.
Canaan’s total revenue also rose 33.9 percent compared to the first quarter to $73.9 million. However, this increase reflects a still unprofitable situation compared to the same period of the previous year.
Nangeng Zhang, Chairman and CEO of Canaan, said, “Despite the relatively low level of Bitcoin price in the second quarter, our sales growth efforts in different areas have yielded positive results, including large customers, channels and retail.” he said. Zhang also said, “Our mining revenue set a new record in the second quarter of 2023. We have recently taken expansion steps towards new mining projects in Africa and South America.” said.
However, the struggle for profitability continues for miners this year. Mining costs of $30.6 million in the second quarter resulted in a total net loss of $110.7 million. This represents a significant decrease compared to the net profit of $90.1 million in the same period last year. Net loss also exceeded a loss of $84.4 million in the first quarter. Inventory impairment and property and equipment impairment were also effective in this increase.
“Undoubtedly, we are facing weak purchasing power on the demand side and constant market pressure. In addition, factors such as regional legislative changes and violations of the agreement by some partners have a negative impact on our mining operations.” He summed up the situation.
