Japanese IT giant GMO Internet has just reported an operating loss of 1.36 billion yen, or about $11.75 million, for its cryptocurrency business last year.
The firm published its financial results for the fiscal year 2018 on Tuesday, saying its overall crypto segment, including exchange and mining businesses, made $74.51 million in net sales for 2018.
While its exchange business managed to profit almost $7 million last year, the profitability of GMO’s mining unit continued to decline throughout the year and recorded $18.3 million in total losses. And the Q4 2018 saw the largest loss for crypto mining, which accounted for 60 percent of GMO’s yearly losses in this unit.
Further, GMO indicated in the financial report that the loss for the year did not include an “extraordinary loss” of 35.3 billion yen (or $319.23 million) in its cryptocurrency mining business.
Back in December, GMO said it would record an extraordinary loss, consisting of impairment loss and losses from transfers of receivables, as it quit making and selling of crypto miners following a year of bearish market conditions.
To that effect, GMO also announced a change in policy for its crypto mining business, including relocating it to a new mining center. This is because of its “mining share did not increase as expected due to the rise of the global hash rate,” a massive decline in bitcoin price last year, and the purchase of “expensive mining machines from other manufacturers, which led to decreased profitability.”
As such, the company now plans to move to a new undisclosed region by end of this year, which will allow it to get a less expensive power supply.
“The electricity cost in the new location, which is confidential, is less than half of that in Northern Europe, which is 7-8 cents per kWh including running costs. We believe the relocation will impact our earnings this summer,” GMO said.
Regarding its plans to launch a yen-pegged stablecoin dubbed GMO Japanese Yen or GYEN, the firm said it is on track and aims to launch it later this year in overseas markets.
The firm initially announced back in October regarding its stablecoin issuance plan, aimed at getting into the blockchain remittance and settlement business.
Yen and bitcoin image via Shutterstock