Home Cryptocurrency Canaan reports $33M net loss for 2020 despite bullish Bitcoin price action

Canaan reports $33M net loss for 2020 despite bullish Bitcoin price action

by Gordon James

The rising price of Bitcoin in 2020 was not enough to prevent Canaan from posting a net loss in 2020.

According to the company’s unaudited financial report for the fourth quarter of 2020, the bitcoin (BTC) producer’s net loss was approximately $33 million. However, Canaan’s net loss in 2020 is significantly less than the $148 million reported in 2019.

In fact, reducing Canaan’s net losses has been a consistent theme in the company’s 2020 quarterly results. As previously reported by Cointelegraph, strong growth in gross profit from mining rig sales helped the company reduce its net loss in the second quarter of 2020 by more than 90% compared to the same period last year.

In a report released Monday, Canaan revealed that its net revenue for 2020 is approximately $68.6 million, a 66% decrease from the revenue figures in its 2019 financial reports.

The significant drop in sales also means that Canaan’s annualized gross profit has fallen sharply from $79 million in 2019 to less than $6 million in 2020.

Despite the decline in net sales, Canaan says this trend will reverse in 2021. The company expects net sales of $61 million for the first quarter of 2021.

Like other Chinese miners, Canaan’s mining shares in cryptocurrencies have fallen amid a persistent global semiconductor shortage.

Canaan CEO Nancheng Zhang said the volume of bitcoin equipment pre-orders for the company’s mining operations will drive revenue growth, the company said:

Although the COVID-19 outbreak caused supply chain disruptions that negatively impacted our revenues in the fourth quarter of 2020, our market leadership as of December 31, 2020 allowed us to secure $174 million in contracts with $66 million in customer prepayments, providing a solid foundation for significant revenue growth in 2021.

At the time of writing, Canaan’s Nasdaq share price is down about 50% from its 2021 peak a month ago. Despite this decline, Canaan continues to experience 179% year-over-year growth.

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