15th Feb 2019 14:19
LONDON (Alliance News) - Argo Blockchain PLC said on Friday it is planning to terminate all existing cryptocurrency mining-as-a-service contracts by April, and it will not accept any new mining subscriptions.
Argo has been looking to refocus its business strategy due to difficult trading conditions in the cryptocurrency market as digital currencies start to face severe price pressure and volatility.
Despite continued demand for the services, Argo Blockchain will start mining directly for its own account.
Also, as part of the restructuring, Argo will implement cost-cutting measures which is expected to lower its mining cost base by 35%.
The restructuring measures and strategy refocus is expected to reduced the overall cash burn and deliver earnings before interest, taxes, deprecation and amortisation breakeven in the second half of 2019.
As at Thursday, Argo's net cash balance was GBP15 million.
"We are being proactive and strategic in light of the tough industry market conditions by taking swift action to cut costs and refocus our strategy. While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve," said Director Mike Edwards.
Shares in Argo Blockchain were up 3.9% at 2.99 pence on Friday.
Related Shares:
Argo Blockchai.