Member Info for Hexam

"but 219 is pleasantly surprising to me..."

That's because you really don't seem to have a clue.

HNS - I think what is throwing your numbers out is that you've assumed the ticket revenue of cinemas is in proportion to number of screens but smaller operators will have much higher takings per screen on average than multiplexes like AMC and CINE.

Lots to take in on that update and I think a mixed bag. The numbers are in line with (sensible) expectations, may be a bit on the low side but this can be explained by some older machines being switched off completely and Texas curtailment (though we don't know exactly how much).

On the plus side for me:

- Productivity is up to around 100 EH per BTC so a step in the right direction but still well behind the leading miners (over 130). Improvement due to switching off some of the older machines which I think was inevitable
- Reduced exposure to the Galaxy Loan
- Looks like they may have increased the depreciation schedule on machines from 3 years to 5 years which makes sense (and will make profits over at least the short to medium term appear higher)
- Also looks like installation of new machines may have accelerated a bit in July with around 0.5EH added?
- Completed the machine swap

On the down side:

- The productivity issue is still a long way from sorted even though one of the main contributing factors (inefficient older machines) has been addressed. Best to wait I think until we know everything is up and running in Texas though to understand where we really stand on that
- Margin down to 37% because of higher electricity costs which increased by over $750k in the month or by around $1,250 per coin mined - about 10% up on last month
- HODL getting worryingly low and no update on funding/liquidity position

Just my views though.

Total is $651m but on page 13 you can see a more detailed split which shows US BO as $501m.

Apologies - just spotted you were looking at Q2 not H1.

Q2 US Box Office for AMC was $501m. This leaves just over $1.8bn for other companies. I still can't see though how you can derive a CINE figure from that.

HNS - Must admit I can't follow your logic at all but AMC US box office was not $908m (I think you've picked up the figure for Q2 total US revenue). The H1 US box office for AMC was $812m. The bit I don't get though is how you get from $1.2m to $900m as this doesn't seem to be based on anything solid?

Anyway the fall in amc may not be due to just the results:

https://www.msn.com/en-us/news/technology/amc-investors-will-go-ape-company-announces/ar-AA10jSYy

After hours market for AMC now down 10%. Hoping CINE results are somewhat better though I'm not quite so confident of us generating cash as I was - note AMC was (slightly) cash positive in Q4 last year like CINE so it's not as if they are starting from a much worse position.

Also hopefully somebody can spot some positives that my tired brain has missed or mistakes it has made in interpreting the results...

Agreed - they don't look that great to me on first look with negative cash flow for the first half of the year ($447m) and even negative cash flow for Q2 on its own ($117m) which is surprising given it was a strong quarter (and I think expectation is CINE will be cash flow positive for Q2 and maybe even H1). Consequently net debt has increased.

Their US ticket revenues don't appear to have grown as fast as the US Box Office overall which indicates they've lost market share - hopefully to CINE :-)

Another worrying thing is their food and beverage per patron has actually gone down both in the US and internationally (by 4% and 8% respectively).

One other thing that is a slight concern is that they are playing catch up on lease payments following Covid. This might also affect CINE too which will temporarily worsen their cash position.

I'm certainly struggling to find the positives here and it seems the market is too at the moment.

@casopinas - yes, those amounts are an actual drain on future cash flows but I don’t think they hit profits as they were already booked against those (in a similar way to the £1.8bn in H1) in an earlier year.

"Cleanspark Mined 384 Btc with 2.9EH"

So 132 BTC per EH - and up there with BITF as one of the better ones.

"I don’t disagree!" - Sorry my point about the two different things was in in response to another poster and yes, I read the article - for seeking alpha it was surprisingly good!...and I referenced it in my response.

@liquidsky - I think we are saying the same thing but in a different way i.e. I'm saying offset where you are saying reversed for the hedging.

I'm not sure I agree with the FCF of $597m as that is before capex etc. so arguably the minus £68m is more relevant (i.e. the free cash flow from continuing operation). Though it depends what context you are using the number. That has also improved by over £1m but appears to be down more to movement in payment timings rather than profit driven?

I think there are two different things going on here. There is the accounting of the current hedging that is artificially hitting the H1 result by $1.8bn (and which is not I think a 'screw up') but also this which does sound more like one and will hit cash flow over the next few years (and was also mentioned in the article posted by @LiquidSky):

"In 2020, the Group took action to reduce the size of the USD hedge book by $11.8bn across 2020-2026, resulting in an underlying charge of £1,689m at 31 December 2020. In 2021, this estimate was updated to reflect the actual cash settlement cost of £1,674m and resulted in a £15m gain to underlying finance costs in the year to 31 December 2021. The cash settlement costs of £1,674m covers the period 2020-2026, £186m was incurred in 2020, £452m was incurred in the year to 31 December 2021 and £265m was incurred in the period to 30 June 2022. The Group estimates that future cash outflows of £61m will be incurred in the remainder of 2022, £389m to be incurred in 2023 and £321m spread over 2024 to 2026"

Why do things have to be so complicated...?

@LiquidSky - that's useful and clear. Thanks.

The only point I would add is that yes it is a paper/book loss this year but (assuming FX rates stay the same going forward) it will be a real loss in the future that offsets the opposite impact of whatever it is that you are hedging against now. Isn't that the case?

It does though seem that we should focus on the profit without this £1.8bn adjustment that is distorting it so that basically the business is broadly breakeven at the moment - but equally when the corresponding upside comes through in the future that should be disregarded too in judging ongoing profitability for the same reason?

It still means though that although these results are still not great they are at least not nearly as bad as they appear to be by just looking at the headlines - if I've understood right...

"resulting in losses which however are largely on paper only"

How come? Is it effectively offset by something elsewhere in the accounts? In which case to get 'true' profit we should exclude the opposite side too if we exclude this. There's not really any such thing as a loss 'on paper only'. A loss is a loss it just may be a different time when it actually hits cash (e.g. like capex and depreciation).

This is key I think to understanding the profitability. The headline at the moment is a whopping £1.6bn loss but is that really reflective of the performance or not?

Thanks FP, but I'm really not bothered by the nuttiness on here, and certainly not 'tormented' by it - though you're right when you said it's not healthy to keep banging one's head against a brick wall so I'll try to do less of that.

@Tegop - As I mentioned yesterday the debt that is that denominated in USD is linked to UK rates (LIBOR) of which there is about $4bn.

However, if the rate increases by 0.5% pa this only increases payments by $20m pa. This is low in relation to the $227m you mention as base rates are still very low compared to the fixed margin that is on top of the variable element and that varies with each loan.

"Please read MJK1 post at 8.35 regarding a 1.8bn mark to market loss. This is just an accounting timing adjustment which will reverse."

I agree it is a non-operational item that is significantly distorting the profit and should be explained a lot better but I don't see why it is a just a timing adjustment and should be expected to reverse?

Without this 1.8bn item the business would have been breakeven and so more in line with what the airlines are currently reporting but whilst it is definitely a distorting factor, and the breakeven figure is more relevant going forward, I don't think we can expect a 1.8bn upside in the future from it reversing unless someone can elaborate?

Yes. As I have said repeatedly - as in for example:

"So yes there is chance the number is less than 200 but ..."

Other examples are available.

"Is it LIBOR, thought we moved to SONIA?"

Just going from the latest accounts - there's a really good section on the loans (on page 140) that gives all the amounts, rates, year of maturity and other terms for anybody interested in the detail - including:

"The rate of interest in the case of any Eurocurrency Rate Loan denominated in Dollars is the rate per annum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited, subject to a 1.00% floor (2020: 1.00% floor). The rate of interest in the case of any Eurocurrency Rate Loan denominated in Euro is the rate per annum equal to the Euro interbank offered rate administered by the European Money Markets Institute, subject to a zero floor. RCF and Term loans are subject to a LIBOR floor of 1.00%."

These apply to the variable rate element - there is also a fixed margin on top which varies by loan.

I'm not aware of any changes since then?