Chinese mining giant Canaan Creative has announced that it has made a net loss of $ 148.6 million in 2019, reflecting a declining profitability over the $ 204.3 million revenue in 2019. The firm released its first earnings report since its IPO in the US last November. Canaan said it sold a total of 10.5 exhash (EH / s) computing power per second, accounting for about 20 percent of the computing power growth of the Bitcoin network last year.
There Was a Significant Decline
Since the IPO of $ 90 million, Canaan’s share price has now declined to about $ 3.5 per share, which is almost 61 percent below the IPO price. The firm posted a net loss of $ 114.7 million in the first quarter of 2019, which grew further with a net loss of $ 31.2 million in the first nine months of 2019. Canaan’s CEO and founder, Nangeng Zhang, said the firm saw a “significant drop” amid volatility in Bitcoin price in December, despite sales growth in October and November.
The remarkable point in the earnings report is: Cost. Canaan’s sales have increased over the past year, but the cost has also increased and profitability has decreased. The revenue cost for Canaan in 2019 was $ 278 million, which is $ 78 million more than the total revenue for the year.
Canaan’s revenue costs generally include raw material, production and logistics costs, as well as written values of prepayments and stocks to produce mining equipment.