Iris Energy Limited (NASDAQ:IREN) told investors it expanded its data centre capacity in British Columbia by more than five times to 160 megawatts (MW) across three sites during the three months to end-December 2022.
Releasing second-quarter results, the sustainable Bitcoin mining company said the growth came despite "a challenging year for the digital assets industry as well as broader equity markets.”
“We are also pleased to have announced that we have entered into an agreement to utilize our remaining Bitmain prepayments to acquire new miners without any additional cash outlay, and, in doing so, will increase our self-mining capacity from 2.0 EH/s1 to 5.5 EH/s,” Iris Energy co-founder and co-CEO Daniel Roberts said in a statement. “Looking forward, we believe we are well positioned to capitalize as markets continue to improve.”
READ: Iris Energy achieves milestone as it increases self-mining capacity to 5.5 EH/s
During the quarter, Iris said it mined 722 Bitcoin, down from 780 Bitcoin in 1Q, with the lower production primarily driven by a higher global hashrate rate during the period. The reduction in the number of Bitcoin mined and a decrease in the price for the digital currency resulted in Bitcoin mining revenue of $13.8 million, as compared to $16.2 million a quarter earlier.
Electricity costs rose to $7.4 million from $6.6 million in 1Q due to the growth in hashrate during the period and excess demand charges attributable to unutilized power capacity following the termination of hosting arrangements in connection with certain of its limited recourse equipment financing facilities. Site and corporate costs increased to $9.3 million from $8 million in the earlier quarter.
The company reported a net after-tax loss of $144 million, including a $105 million non-cash impairment charge and loss allowance for receivables. Its adjusted underlying earnings (EBITDA) loss of $8 million includes $5.1 million of losses on asset disposals, compared to a $1.7 million gain in the first quarter.
Of the non-cash impairment charge and loss allowance for receivables, the company said $66.5 million relates to the limited recourse equipment financing SPVs with the residual amount primarily relating to mining hardware.
It ended the quarter with cash and cash equivalents of $39.4 million and no debt.
Operational and corporate highlights include:
- 30MW expansion at Mackenzie (from 50MW to 80MW) energized ahead of schedule on December 6;
- In January 2023, total operating capacity increased to 1.7 EH/s;
- Also in January 2023, approximately $6 million in net cash proceeds were received from further monetization of Bitmain prepayments;
- In February 2023, entered into an agreement to utilize all $67 million of remaining Bitmain prepayments to acquire 4.4 EH/s of new miners without any additional cash outlay:
- Newly acquired miners to be installed in the company's data centers, increasing self-mining operating capacity from 2.0 EH/s1 to 5.5 EH/s over the coming months;
- Obligations under existing 10 EH/s contract with Bitmain have now been fully resolved; and
- Considering options for the sale of surplus miners to re-invest in growth initiatives and/or corporate purposes.
- Energization at the 600MW site at Childress is expected in the coming months, including completion of the first 20MW of data center capacity. Approximately $18 million in previous deposits with AEP Texas are expected to be refunded following energization at Childress; and
- Welcomed Cesilia Kim as chief legal & risk officer and announced the retirement of the company's president, Lindsay Ward.
Iris Energy is a leading owner and operator of institutional-grade, highly efficient Bitcoin mining data centers powered by 100% renewable energy. The company supports the decarbonization of energy markets and the global Bitcoin network.
Contact the author at stephen.gunnion@proactiveinvestors.com