GMO Internet, a Japanese IT giant that has ventured into the cryptocurrency sector through a mining operation and a cryptocurrency exchange, has recently reported an operating loss of 1.36 billion yen (about $11.75 million) in its cryptocurrency business last year.
According to the firm’s financial results for the fiscal year 2018, it made $74.51 million in net sales last year through its crypto segment. Its cryptocurrency exchange reportedly managed to make nearly $7 million in profit, while its mining venture lost roughly $18.3 million.
Per the results, the fourth quarter of last year saw the largest loss. According to CryptoCompare data, during Q4 of 2018 the prices of most cryptocurrencies hit their low in this bear market, with bitcoin hitting a $3,200 low in December.
As CoinDesk pointed out, GMO noted the loss didn’t include an “extraordinary loss” of $319 million in its cryptocurrency mining business, which it forecasted in December over the impairment losses from transfers of receivables, coming from it stopping producing and selling cryptocurrency miners.
As covered, the company left the bitcoin mining hardware sector after enduring significant losses. Given its results, the IT giant is changing its crypto mining business’ policy. It’s now set to relocate to a new mining center, as an increasing bitcoin hashrate stopped it from increasing its share in the market.
The company also pointed out that it purchased “expensive mining machines from other manufacturers,” which saw its profitability decrease. To counter the trend, it’s looking to move to an unnamed location this year, where it’ll pay less for energy.
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.
It revealed it’s still planning to launch its Japanese Yen-backed stablecoin GYEN, and noted it’s looking to launch it this year in overseas market.