Bitfarms Reports Financial Results for the Three Months Ended March 31, 2020 – Stockhouse

Bitfarms Ltd. (Bitfarms”, or the Company”) (TSXV:BITF) today announced its consolidated results for the quarter ended March 31, 2020.

Q1 2020 Financial Summary and Corporate Highlights

We are pleased that, despite the difficulties in general market conditions presented by the COVID-19 pandemic in Q1 2020 for most companies, Bitfarms’ operations were able to continue in normal course and yielded positive EBITDA and Adjusted EBITDA. We are pleased that the Company was able to achieve a 47% gross mining margin in the first quarter amidst challenging and uncertain market conditions.

We believe our financial performance relative to our competition reflects the difference in the strength of Bitfarms’ operational efficiency in Bitcoin mining versus our public peers. The cost efficiency of the Company’s operations is further reflected in the break-even cost of production of each Bitcoin of $3,988, which compared very favorably to publicly disclosed financial information of other miners. The break-even cost of production of each Bitcoin achieved of $3,988 achieved by the Company also compared very well to the average Bitcoin market price of approximately $8,261 during the first quarter” commented John Rim, Chief Operating Officer and Chief Financial Officer.

Emiliano Grodzki, Interim Chief Executive Officer of Bitfarms added, Bitfarms continues to solidify its position as the industry leader in terms of operational efficiency and financial performance. We will continue to carry out our strategy of disciplined, timely and cost efficient growth to achieve greater scale and further our leadership in this burgeoning industry.”

________________________ 1 EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Gross mining profit and Gross mining margin are non-IFRS performance measures; please refer to the end of this press release regarding the use of Non-IFRS Performance Measures. 2 Represents the break-even cost of Bitcoin based on variable cost of electricity and is calculated by taking the total electricity costs related to the Mining of each Bitcoin divided by the total number of Bitcoin mined, in the relevant period.

Financial Review

Consolidated Company Results (000’s)

(U.S.$ in thousands except where indicated)

Three months ended

For the periods ended as indicated

Mar. 31

2020

Mar. 31

2019

$ Change

% Change

Revenues

9,212

3,629

5,583

154%

Cost of sales

7,917

3,417

4,500

132%

Gross profit

1,295

212

1,083

511%

Gross margin

14%

6%

-

-

G&A and other expenses

2,805

1,923

882

46%

Operating loss

(1,510)

(1,711)

201

12%

Operating margin

(16%)

(47%)

-

-

Financial income

363

25

338

1352%

Interest expense

1,385

132

1,253

949%

Other financial expenses

-

188

(188)

(100%)

Total financial expenses

1,385

320

1,065

333%

Pre-tax loss

(2,532)

(2,006)

(526)

(26%)

Income tax recovery

(108)

-

(108)

100%

Net loss

(2,424)

(2,006)

(418)

(21%)

Net loss per share - basic

(0.03)

(0.02)

(0.01)

(44%)

Gross mining profit (1)

4,139

1,087

3,052

281%

Gross mining margin (1)

47%

36%

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Bitfarms Reports Financial Results for the Three Months Ended March 31, 2020 - Stockhouse