Canaan Narrows Q1 Loss to $5.6 Million Amid Weakening Demand for Mining Hardware

Bitcoin mining rig producer Canaan Inventive reported a internet lack of $5.6 million for the primary quarter of 2020, down from $9.5 million a 12 months earlier.

The Chinese language firm reduce costs of its ASIC-based machines by over 50% in an effort to enhance gross sales, however that wasn’t sufficient to forestall the heavy loss. Demand slumped because the coronavirus pandemic, which disrupted the motion of products worldwide, took its toll.

Shares of Canaan fell as a lot as three.51% to $three.85 on the Nasdaq Inventory Trade, at Press time. The inventory has tanked from a 52-week excessive of $13

For the interval January to March, income climbed 45% to $9.four million from $6.6 million the earlier 12 months, pushed by a 19% enhance in whole computing energy offered.

In accordance to Canaan’s earnings launch revealed on Friday, the agency offered zero.9 million terahash per second (TH/s) of Bitcoin hashpower, up from zero.7 million TH/s in the identical interval in 2019. This 12 months’s terahash gross sales account for about 1% of the BTC community’s present whole.

Canaan chief govt officer Zhang Nangeng instructed analysts in an earnings name that: “The general market state of affairs since December final 12 months till January had not been too good. So the unit worth per TH/s was certainly decrease.” He added:

And the logistics in mainland China had mainly stopped across the Chinese language new 12 months due to the Covid-19 pandemic. So although bitcoin’s worth was at a better level in February and early March, the pandemic largely affected our gross sales.

Within the evaluation quarter, analysis and improvement bills rose to $5.9 million from $four.38 million beforehand, mentioned the agency. Canaan reported money and money equivalents of $37.three million for the March quarter, down from $72.three million on the finish of December final 12 months.

“The lower was primarily due to larger short-term investments as the corporate invested $24.5 million in short-term investments as of March 31, 2020,” it mentioned.

Canaan, which has a market worth of $603 million, didn’t challenge second-quarter forecasts citing the uncertainty created by the coronavirus and the latest third halving of Bitcoin.

What do you concentrate on Canaan’s monetary outcomes? Tell us within the feedback part under.

Picture Credit: Shutterstock, Pixabay, Wiki Commons

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