Cathedra Bitcoin reports Q3 earnings, revealing year-to-year decline

Canadian-based Bitcoin mining company Cathedra Bitcoin Inc. has published its Q3 earnings report, revealing a year-to-year decline.

According to the report, Cathedra earned 1.49 million CAD (around US$1.10 million) within three months ending on September 30, 2022. Within the same period last year, the company earned 1.55 million CAD (US$ 1.15 million). Bitcoin lost about 50 percent of its value between Q3 2021 and 2022.

The management acknowledged the Bitcoin mining conditions, which had “continued to worsen as the year has progressed.” However, Cathedra assured investors that relative to its peers, the company was relatively strong.

“Fortunately, we have stayed one step ahead of the market at all times, strengthening the Company’s liquidity position and balance sheet in the spring by issuing equity, selling assets, and retiring debt in preparation for a prolonged economic downturn,” the management added.

The company also managed to moderate its loss due to Bitcoin’s lower valuation by improving its operation. Cathedra installed 522 Bitmain Antminer S19J Pros at a data center partner in Kentucky, which improved the mining company’s hash rate by 52 PH/s. Per May 2022, Cathedra pays a fixed rate (US$0.055 per kilowatt hour) and an additional 10 percent of the gross revenue to the host for one year.

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Cathedra has entered another hosting agreement with a third-party data center in Tennessee for 372 units of Bitmain Antminer S19J Pro machines.

This deal runs for one year, with Cathedra paying US$0.07 per kilowatt hour and an additional five percent gross revenue to the data center. The agreement increased Cathedra’s Bitcoin mining hash rate by 37 PH/s.

Cathedra’s management decided to extend the moratorium on manufacturing-related capital expenditures until the crypto winter improved to save cash. To further maintain its liquidity, Cathedra opted not to make the final payment on its July batch of S19J Pros and take only 635 machines instead.

It also concluded a partnership with Great American Mining (GAM). Cathedra sold four containers to GAM in exchange for waived generator and power fees.

In the third quarter of this year, Cathedra recorded an active hash rate of around 166 PH/s across four data centers in Washington, Tennessee and Kentucky. This number increased in the fourth quarter as Cathedra posted a total active hash rate of 203 PH/s by late November.

Challenge in Bitcoin mining

The crypto winter has negatively affected Bitcoin mining companies. The situation is exacerbated by FTX's collapse, which increases the distrust in the crypto industry and further pushes down the value of tokens.

The Bitcoin mining industry faces a challenge to survive as energy costs have continued to rise but with little to no return due to failing prices. Some mining companies even opted to move operations to countries with cheaper energy fees.

Due to the prolonged winter, several crypto-mining companies declared bankruptcy this year. Compute North, the U.S. second-largest Bitcoin mining hosting provider, filed for Chapter 11 in September and had to sell its assets to fulfill US$500 million obligations.

Later, Core Scientific filed for bankruptcy protection after posting losses for two consecutive quarters, amounting to more than US$1 billion. The mining company announced that its cash reserve would be “depleted by the end of 2022 or sooner.” Core Scientific faced a lawsuit from investors alleging that it had failed to disclose financial fumble before the Chapter 11 filing.