Feb 16, 2024 12:25
In earlyDecember, the first cryptocurrency company made its debut on the Abu Dhabistock market, receiving a warm welcome from investors. Two months later, PhoenixGroup UAE, specializing in the mining of cryptocurrency assets, published its2023 report. Despite a significant drop in revenue, it achieved anincrease in net profit.
Phoenix Announces 2023Results: Revenues Down, Profits Up
Theunaudited preliminary results released this week show that the digital assetminer significantly increased the value of its assets compared to 2022, growingfrom $230 million to $834 million.
Althoughrevenues for 2023 were almost three times lower than in 2022, dropping to$288 million, the company improved its operating profit, which grew 50% to$208 million. The net profit for the reported period was nearly $221 million, withearnings per share modestly increasing from $0.03 reported in 2022 to $0.04.
But, wheredid such a significant jump in profit come from, with a very strong limitationof revenues? We looked for information on this in the company itself. Itsrepresentatives stated this was due to a "one-time contract," which distorted the company's expected cash flows.
"Wesaw significant organic growth of 20% beyond that outlier, demonstrating thestrength of our core business," the company commented in an e-mailedstatement to Finance Magnates. "This is further reflected in ourimpressive year-on-year growth in key areas such as self-mining which saw anincrease of 480%."
The Phoenix soars in 2023! Phoenix published its earnings report boasting an increase of 50% in net earnings.Stay tuned for even more impressive results in 2024Check it out here:https://t.co/WFc7JhgczH pic.twitter.com/bbJac3RMuq
Phoenix Group (@phoenixgroupuae)
February 15, 2024The companyalso mentions an increase of 119% in hosting service revenues in the report. Thiswas made possible by establishing cooperation with "high-net-worth individuals,"creators of mining equipment and power supply companies.
"Oursuccess has been impressive, but 2024 promises to be trulytransformative," said Seyed Mohammad Alizadehfard (Bijan), the Co-Founderand CEO of Phoenix. "With ambitious plans and an unwavering commitment toexcellence, the group is poised to redefine success, not just in the UAE, buton a global scale."
Earlierthis year, the company announced that it had entered into an agreementwith Bitmain, a manufacturer of cryptocurrency miners, to purchase machines formining cryptocurrencies. The deal was valued at $187 million.
Shareholders Show Lack ofOptimism
Althoughthe Phoenix Group UAE IPO was met with a warm reception from shareholders andthe company raised $370 million, it has been on a downward trend since then.From the highs reached on December 8, shares lost about 20% to Wednesday'sminimums (tested after the publication of the report).
Thecompany's representatives claim that the decline in valuation may be caused by"various factors." However, they remain convinced of the"long-term growth prospects based on strong financials and strategicpartnerships."
The company's IPO came at a time when other publicly listed firms in the digital asset mining sector were starting to transition their machines away from crypto mining and towards providing computing power for the artificial intelligence industry instead. In 2022, total revenues for the cryptocurrency mining industry dropped to $6 billion, a significant drop from the all-time high of $12 billion generated in 2021.
We willhave to wait until March for the full and audited results of the company whenwe will learn the exact structure of revenues, costs and the condition of theenterprise. As Phoenix claims, the report "will further demonstrate theunderlying value" of the company.
This article was written by Damian Chmiel at www.financemagnates.com.
World Crypto Global
