Bitcoin miner DigitalBTC $6.77m in the red

Australian-listed DigitalBTC continues to defend the bitcoin business, despite posting its first complete financial year results, which sees the cryptocurrency miner take a net loss after tax of $6.77 million.
Written by Asha Barbaschow, Contributor

The Australian-listed bitcoin-mining company, DigitalBTC, has reported a net loss after tax of $6.77 million, and negative earnings before interest, tax, depreciation, and amortisation (EBITDA) of $3.16 million for the full year, ending June 2015.

Although posting a loss, the cryptocurrency miner told shareholders that its FY15 results reflected a "strong performance from the company's bitcoin operations", with bitcoin mining generating $6.4 million in revenue.

"Despite the unfavourable depreciation of the bitcoin price, I am pleased with the growth the company has achieved from its bitcoin trading and mining activities, which continue to provide strong revenue generation," executive chairman Zhenya Tsvetnenko said.

In May, DigitalBTC raised AU$3.5 million to fund the development and roll out of AirPocket, an app-based peer-to-peer, cross-currency cash remittance platform. The product will be available in selected Latin American markets later this year, the company said.

"We have made significant progress during the course of the year towards the development and commercialisation [of AirPocket], with a number of agreements in place to accelerate the launch and consumer uptake of the product," Tsvetnenko said.

Last financial year, DigitalBTC -- which trades as Digital CC Limited -- posted an underlying net profit after tax of $600,000 on revenue of $4 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of $2.5 million.

Although this was the last time the company was in positive territory, its FY14 results were based on only a few months of operation, after DigitalBTC listed officially in early June 2014 via a reverse takeover of investment firm Macro Energy.

In the first quarter of this financial year, the company reported its first loss, with a negative net operating cash flow of AU$261,000, for the three months ending September 2014. DigitalBTC told shareholders that although the value of the cryptocurrency had dropped, the devaluation had not impacted its performance.

"Investors should of course remember that movement in the bitcoin price has little bearing on the technology and the digital currency revolution, of which we are a leading participant," Tsvetnenko said at the time.

"Short-term fluctuations do not affect our continued progress, and we are well funded to operate our business and work towards achieving our near-term goals around managing our mining capacity and launching our cutting-edge software products."

In December, the company stayed in the red, having posted an underlying net loss after tax of $2.3 million for its first-half financial results. For the half-year, DigitalBTC reported a positive EBITDA of $216,934, and revenue from ordinary activities of $14.5 million.

Again, the overall operating loss was attributed to the fluctuating value of bitcoin, however, Tsvetnenko told investors at the time that the six-month loss was due primarily to "non-cash accounting adjustments to the fair value of bitcoin inventory", along with performance rights and depreciation.

For the three months ending March 2015, DigitalBTC recorded another loss, with a negative quarterly operating cash flow of $1.2 million. The company also recorded a cash inventory of AU$2.6 million as of June 30, 2015, with an additional AU$1 million tied up in bitcoins.

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