XTB.com shares fall (again) after confirming weak Q3 results

As was first reported on LeapRate at the end of October, Warsaw based X Trade Brokers Dom Maklerski SA (WSE:XTB), which operates Retail Forex broker XTB.com, confirmed today that its Q3 Revenues and Profits were significantly down from both last quarter, and from last year.

XTB confirmed that Q3 revenues came in at 42.8 million zlotys (USD $11.0 million), down a whopping 55% YoY from last year’s Q3 Revs of 95.7 million zlotys. In the first two quarters of 2016 XTB averaged revenue of 56.9 million zlotys, 25% more than in Q3.

The company still reported a net profit for Q3 of 4.2 million zlotys ($1.1 million), down 92% from 50.9 million zlotys last year Q3.

The company blamed the lower Revenues mainly on lower volatility compared to previous quarters, creating less investment opportunities for XTB clients. Offsetting the lower revenues were also lower operating expenses in Q3, down by 37% (i.e. PLN 20 million) QoQ. This decrease resulted primarily from lower marketing costs and other external services. The company spent more money in Q2 as part of a global branding campaign around the XTB’s May 2016 IPO.

XTB had also reported that its planned acquisition of the customer portfolio of HFT Brokers has hit a snag. XTB has formally withdrawn from negotiations after a disagreement over price.

Shares of XTB crashed by 22% in October when the extent of the activity drop was first reported on LeapRate, setting a new all-time low of PLN 6.57. XTB shares have recovered somewhat, but today again are trading down by 1%, at PLN 7.95.

XTB successfully completed its IPO in May at a valuation of $349 million, at a price of PLN 11.50 per share. XTB shares have traded as high as PLN 15.47, but at their current price of 7.95 sit 31% below their IPO price.

XTB’s Q3 results presentation can be seen here (pdf).

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