Warsaw based X Trade Brokers Dom Maklerski SA (WSE:XTB), which operates Retail Forex broker XTB.com as well as the X Open Hub trading platform, has issued Q3 results indicating continued improved performance for the company, as XTB continues to recover from what was a very slow start to the year.
XTB continued its quite unusual pattern of up-and-down performance, with Revenues up in Q3 to PLN 73 million (USD $20 million), versus PLN 67 million in Q2 and PLN 59 million in Q1. Both of those figures are well down, however, from the PLN 94 million which XTB brought in during Q4-2016.
On the bottom line, XTB had a fairly good quarter with Net Profit of PLN 31.3 million (USD $8.7 million), more than the PLN 29.4 million XTB earned in the first two quarters of 2017 combined.
XTB, which had been one of the leading Retail FX brokers serving Turkish traders, took a PLN 5.6 million writedown earlier this year in the carrying value of its Turkey FX broker license, with that country introducing new minimum account size and leverage cap rules. Turkey later banned all foreign FX brokers from taking Turkish clients, as was first reported at LeapRate.
XTB saw a slowdown in net deposits by clients (money deposited by clients less amounts withdrawn) during Q3, at PLN 56.8 million ($15.8 million) versus PLN 216 million in the first half of the year.
Product-wise, about half of XTB’s revenue during Q3 was generated from client trading in stock index CFDs. The most important of these are CFDs based on German and American stock indices (DE30, US500, US100, US30).
Geographically, clients in Central and Eastern Europe represent more than half (55%) of XTB’s revenues, including the company’s home market of Poland at 33% of Revenues. Western Europe accounts for 40% of activity. Management of XTB stated that the greatest potential for business growth is in the German, French and Latin American markets.
Management changes
XTB underwent a change in senior management earlier this year. As was exclusively reported by LeapRate in early January, XTB decided to part ways with its CEO Jakub Maly after the company posted poor results in mid-2016, and saw its share price languish following the company’s IPO.
XTB went public on the Warsaw exchange last May at a valuation of about $350 million. However the company’s shares have drifted downward, trading now in the zl 4.80 range, down more than 50% from their zl 11.50 IPO price. The company then confirmed Omar Arnaout as its new CEO in late March. Mr. Arnaout had been with the XTB group since 2007, starting as a Junior Dealer and working his way up the ranks since.
XTB’s full Q3-2017 results report can be seen here (pdf).