Bitdeer Technologies Group — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a quarterly filing; the supplied filing text does not provide standalone fourth-quarter results. Financial statements are prepared under IFRS. The audited 2020 and 2021 comparative figures include restatements described below.
Business context
Bitdeer operates cryptocurrency mining and related services: proprietary mining, Cloud Hash Rate sales, and hosting. In 2022, Bitcoin accounted for 96.1% of proprietary mining revenue. Hosting grew substantially, while proprietary mining revenue fell amid weaker Bitcoin prices and a lower share of network hash rate. The SPAC business combination closed on April 13, 2023, after year-end; Class A shares began trading on Nasdaq as BTDR on April 14, 2023.
Key financial results
| Metric (US$ millions, except margins) | FY2022 | FY2021 |
|---|---|---|
| Revenue | 333.3 | 394.7 |
| Gross profit | 83.3 | 241.4 |
| Gross margin | 25.0% | 61.2% |
| Operating profit/(loss) | (60.6) | 130.8 |
| Net profit/(loss) | (60.4) | 82.6 |
| Adjusted EBITDA (non-IFRS) | 93.2 | 281.8 |
| Adjusted profit/(loss) excluding share-based payments (non-IFRS) | 30.3 | 171.0 |
| Net cash used in operating activities | (268.0) | (52.5) |
| Net cash generated from investing activities | 133.8 | 394.6 |
Revenue declined 15.6% year over year. Proprietary mining revenue decreased 67.4% to US$62.4 million; Cloud Hash Rate revenue fell 2.3% to US$121.3 million. General Hosting rose to US$99.3 million from US$18.3 million, and Membership Hosting contributed US$26.1 million in its first revenue-generating year. Mining-machine sales fell to US$0.7 million from US$45.7 million.
Cost of revenue rose 63.1% to US$250.1 million, mainly because electricity costs increased 138.9% to US$139.5 million as operations expanded. Depreciation of mining machines decreased to US$29.3 million, while depreciation of property and equipment increased to US$30.4 million. Operating expenses remained significant, including US$90.6 million of share-based payment expense. Net loss included a US$3.1 million loss on cryptocurrency disposals, compared with a US$18.7 million gain in 2021, and US$4.2 million of net finance expense.
Financial position and liquidity
- At December 31, 2022, cash and cash equivalents were US$231.4 million, down from US$372.1 million a year earlier. Restricted cash was US$11.5 million; redeemable-on-demand unlisted debt investments were US$31.1 million.
- Total assets were US$651.4 million and total liabilities US$333.1 million. Deferred revenue was US$182.3 million.
- Borrowings were US$29.8 million, principally an unsecured US$30 million convertible note bearing 8% interest and due July 23, 2023. Lease liabilities were US$70.4 million; contractual undiscounted lease payments totaled US$88.1 million.
- Management said cash, short-term investments and anticipated proceeds from cryptocurrency disposals would cover expected working capital and capital expenditure needs for at least 18 months from the report date. This is management’s estimate, not a guarantee.
- Operating cash outflow was US$268.0 million despite positive adjusted EBITDA. The filing explains that cryptocurrency revenue is recognized when earned, while cryptocurrency disposal proceeds are classified as investing cash flows. Investing cash flow included US$561.0 million of cryptocurrency disposal proceeds and substantial cryptocurrency purchases for lending/investment activity.
Material changes, outlook and notable items
- Power costs and fleet expansion pressured 2022 results. Average electricity cost was reported at US$50/MWh for 2022. As of March 31, 2023, management reported 795 MW of operating electricity capacity, 179 MW under construction and another 550 MW contracted or negotiated but not under active construction. These are post-year-end figures and plans, not completed 2022 capacity.
- Management intended to emphasize General Hosting and Membership Hosting, using a greater portion of growing datacenter capacity; Cloud Hosting was expected to continue but no longer be the main product. No formal earnings or revenue guidance is provided in the supplied text.
- Management cited Bitcoin-price volatility, network difficulty, electricity availability and cost, regulation, capital needs, and execution of datacenter expansion as key risks. The filing describes the expected 2024 Bitcoin reward halving and notes that 2022 market stress reduced mining profitability and demand for related services.
- The company reported no material legal or administrative proceedings. In 2022, it acquired Asia Freeport Holdings as an asset acquisition for approximately US$26.8 million of total consideration, adding investment properties. It also invested US$17 million in a Matrixport-affiliated limited partnership.
- Substantially all cryptocurrency was held in custody by Matrixport Group, a related party associated with founder Jihan Wu; cryptocurrency disposals were primarily to that group. The company reported that 2022 loans and wealth-management products with Matrixport were redeemed by year-end and said it did not anticipate further digital-asset lending or wealth-management activity in the foreseeable future.
- The filing identifies a material weakness in internal control over financial reporting, citing insufficient personnel with appropriate accounting expertise. Management said 2020 and 2021 revenue presentation and cash-flow classification errors were corrected through restatements. Disclosure controls were deemed ineffective at December 31, 2022; remediation was underway, but success was not assured.
Most important facts for investors to verify
- Whether operating cash burn, capital spending and cryptocurrency disposal proceeds support management’s stated liquidity runway; monitor the convertible note’s post-filing repayment, conversion or refinancing outcome.
- Whether hosting growth and margins can offset weaker proprietary mining revenue, rising electricity costs and Bitcoin/network-difficulty volatility.
- Progress, funding and power availability for the 179 MW under construction and 550 MW in the pipeline, including whether planned capacity becomes operational on schedule and within budget.
- Remediation of the material weakness, effectiveness of financial reporting controls, and the implications of the prior-period restatements.
- Related-party exposure and safeguards around Matrixport custody, cryptocurrency sales and the limited-partnership investment; also assess customer concentration, as one customer represented 20.07% of 2022 revenue.
- How the post-merger share structure, controlling voting rights, equity awards and potential dilution affect public shareholders.