(Alliance News) - KR1 PLC on Thursday said it increased its operating profit and earnings in 2022, but its net asset value fell significantly, due to an extremely volatile market as multiple crises in crypto currencies "saw investor confidence plummet".

The Isle of Man-based investor backing companies in the blockchain industry said NAV at December 31 was 39.47 pence per share, down from 122.68p at the same time a year prior. Total NAV was GBP70.0 million, down 62% from GBP185.0 million.

Shares in KR1 were down 1.0% at 49.00p each on Thursday in London. The stock is up from 28.00p a year ago but down from 116.50p two years ago.

Income from digital assets decreased by 3.6% to GBP20.2 million in 2022 from GBP21.0 million in 2021. Operating profit, however, more than quadrupled to GBP19.5 million from GBP4.8 million, while diluted earnings more than tripled to 10.96p per share from 3.12p.

KR1 said that 2022 showed the "cyclical nature of the digital asset economy", featuring as it did "the unravelling of multiple crises". These included the collapse of digital currencies Terra and Luna along with parent company Terraform Labs, and the implosion of FTX Trading Ltd and Alameda Research.

"Following the momentous bull market cycle previous to that, 2022 saw investor confidence plummet and an exit of participants and liquidity from the digital asset sector," KR1 noted.

However, the company maintained that it was still building a "high quality 'long-only' portfolio of innovative digital assets", allowing it to survive and even benefit from market cycles.

Going forward, KR1 said its structure and approach to investments "creates a resilient model which puts the company in a leading position" to benefit from potential future growth in the digital asset economy.

"Whilst the company’s NAV has been impacted by a turbulent year for the crypto market due to multiple crises, KR1 has shown remarkable resilience throughout," said managing directors George McDonaugh and Keld Van Schreven. "We have also strengthened the company with key internal and external appointments and improved reporting transparency with the long-desired publication of our unaudited monthly NAV updates.

"KR1 is well placed to capture an ever-growing inflow of innovative projects seeking investment and deploying capital through a disciplined investment approach."

By Emma Curzon, Alliance News reporter

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