Company: ARBK
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001104659-25-049311
Chunk: 30

Company: Argo Blockchain Plc
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4A
Chunk 30
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, or presented in accordance with, IFRS. This measure should not be considered as an alternative to gross margin determined in accordance with IFRS. The decrease in mining margin from 2022 was driven primarily by the 71% increase in average network difficulty in 2023. The decease in mining margin from 2023 to 2024 was driven by the halving that occurred in April 2024. The table below reconciles Mining Profit to gross profit, the most directly comparable IFRS measure:

                                        YEAR ENDED DECEMBER 31                          
                                                          2024        2023        2022  
 ────────────────────────────────────────────────────────────────────────────────────────
  (in $’000’s)                                                                          
  Gross profit                                           1,457       3,101      11,355  
  Gross margin                                               3           6          19  
  Depreciation of mining equipment                      14,171      18,656      20,469  
  Non-mining revenue                                         —           —       (119)  
  Mining Profit                                         15,628      21,757      31,705  
  Mining Profit Margin                                      33          43          54  

Average Direct Cost per Bitcoin Mined.

We define the Average Direct Cost per Bitcoin Mined as the total direct costs of mining at both our owned facilities and hosted facilities (excluding depreciation of mining equipment), divided by total Bitcoin Mined over a given period. For mining at owned facilities, direct mining expenses are inclusive of power costs. For mining at hosted facilities, direct mining expenses are inclusive of the all-in hosting fee that is charged as well as any related service fees. We believe this measure is a useful complement to Mining Profit, as it reflects the average marginal direct cost of each reward earned irrespective of the value of such reward at the time it is earned. Average Direct Cost per Bitcoin Mined excludes the depreciation of mining equipment and so does not reflect the full cost of our mining operations. In addition, Average Direct Cost per Bitcoin Mined or similar non-IFRS measures are utilized by analysts in the cryptocurrency mining industry to compare results across peer companies, and accordingly we believe that excluding the depreciation of mining equipment from Average Direct Cost per Bitcoin Mined is appropriate to facilitate accurate comparisons to the financial performance of other industry participants. Average Direct Cost per Bitcoin Mined is a supplemental measure of our performance that is not required by, or presented in accordance with, IFRS.