Greenidge Generation posts a $107.9 million loss in the second quarter

The mining company Greenidge Generation revised its Texas expansion plans after reporting a second-quarter loss of $107.9 million.

According to the press release, losses arose mainly due to the revaluation of Bitcoin reserves and environmental liabilities.

Greenidge’s revenue for the reporting period was $31.2 million, and the company mined about 621 BTC (230 BTC — for June).

According to CEO Jeff Kirt, the fall in Bitcoin prices by about 60% for the quarter and a sharp rise in energy prices globally created a “difficult environment” for the business.

“Sudden shifts in the mining economics have forced us to rethink the strategy toward prudent liquidity and capital preservation, rather than aggressive growth. As a result, we have decided to pause plans to develop some additional sites in the market of the Texas energy operator ERCOT and, instead, focus on two operating facilities in South Carolina and New York,” said Kirt.

As of June 30, the Greenidge fleet numbered about 27,500 miners with a total hashrate of ~2.5 EH/s. The company expects computing capacity to reach ~3.6 EH/s by the first quarter of 2023.

“Our development plan is fully funded from cash on the balance sheet, and nearly all the necessary equipment has been purchased. The remaining infrastructure will require less than $7.5 million,” commented the head of the firm.

Greenidge ended the quarter with liquid assets totaling $67 million in cash and cryptocurrency reserves. The company also paid a deposit of around $92 million to Bitmain, the miner manufacturer, to pay for the equipment being procured. The payments required to complete the contract were described as “minimal.”

The mining data centre in New York is located on a hybrid power plant it owns. In the second quarter, the facility’s uptime was 100%, despite periodic maintenance. Since the beginning of the year, the plant has been idle for only seven hours, Greenidge emphasised.

The operation of this facility has drawn concerns from local activists and environmentalists, who are convinced of its negative impact on the environment.

In 2022, the New York Supreme Court dismissed the lawsuit brought by environmentalists against Greenidge.

However, in early June, environmentalists and New York Assembly member Anna Kelles urged Governor Kathy Hochul to revoke the mining permit from the company.

Kelles became the sponsor of a bill introducing a two-year moratorium on mining cryptocurrency using energy generated from carbon sources.

In late April, the document was backed by the lower house of the State Legislature, and on June 3 — in the Senate. The bill is awaiting the governor’s signature.

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