Canaan’s Q3 profit plunges 90%

For the third quarter, bitcoin-miner manufacturer Canaan posted net profit of 61.1 million yuan ($8.6 million). The figure was down 90% on the quarter.

Canaan Inc. Reports Unaudited Third Quarter 2022 Financial Results

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— Canaan Inc. (@canaanio) November 14, 2022

The company also reported a 74.8% drop in gross profit — from $130.9 million to $32.9 million.

Canaan sold miners with a total hashrate of 3.5 EH/s during the period. Revenue per unit of hashing power fell 37.1% quarter on quarter, while revenue totaled 978.2 million yuan ($137.5 million).

“The Bitcoin mining market deteriorated during the third quarter, as cryptocurrency prices fluctuated and recently fell to around $16,000. The negative momentum significantly constrained cash flow and miners’ earnings,” said Nangeng Zhao, chairman and CEO of the company.

He added that this forced Canaan to adjust prices on already signed contracts. In physical terms, equipment sales for the quarter were in line with forecasts, he added.

Against the bear market backdrop, the company continued to scale up its own mining operations, expanding in the United States, Zhao noted. Mining of cryptocurrency generated revenue of 62 million yuan ($8.77 million) for the quarter.

“Looking ahead, we face a very difficult period in the industry as the price of Bitcoin falls to a two-year low. The priority is to preserve our cash, minimise costs, and weather this market downturn,” stressed the head of Canaan.

The company’s shares in pre-market trading rose modestly, trading at $2.71. Since the start of the year, the stock has fallen about 47%, from $5.15.

In November 2019, during its Nasdaq IPO, the company issued 10 million American depositary receipts at $9 each.

In May, SEC placed Canaan on the preliminary list of Chinese companies subject to delisting on U.S. exchanges.

Earlier in October, the manufacturer unveiled the new generation of Bitcoin miners 13 Series Avalon Made.

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