Mining rig manufacturer Canaan announces narrowing net loss in Q2 results

A vastly improved gross margin on sales contributed to a reduction in net loss of over 90% compared to figures from a year ago.

Bitcoin mining rig manufacturer Canaan on Aug. 31 released its unaudited financial results for the second quarter of 2020.

While gross profit was up both year on year and quarter on quarter, the company still posted a net loss, albeit one which has narrowed significantly in the last twelve months.

The amount of computing power sold in its application specific integrated circuit (ASIC) hardware was 2.6 million THash/s. This represents an increase of almost 200% on Q1 figures of 0.9 million THash/s, but is an 18.2% drop on figures from the previous year.

Revenues were also up 160% on last quarter, but down a quarter from last year, at RMB 178.1 million ($25.2 million).

However, gross profit of RMB 43.3 million ($6.1 million) was up over 300% year on year, and over 1,700% on figures from Q1.

This was accompanied by a significant increase in gross margin for the quarter to almost 25%. For comparison the gross margin was 3.5% in the previous quarter and 4.5% in Q2 2019.

The result of this was a reported net loss of RMB16.8 million ($2.4 million). This was less than half of the net loss posted in the previous quarter and over 90% less than the RMB 263.1 million reported in the same quarter last year.

Canaan was the first mining rig manufacturer to successfully hold an IPO, in November 2019, although it raised less than 25% of the $400 million projected. Share price has crashed some 75% since then, with today’s value being just $2.19 of their initial $9 sale price.