Polish FX broker XTB sees Q4 Revenues steady at $23 million as CFDs overtake Forex

XTB fx broker office Warsaw

Continuing its recovery under new management which has been sustained throughout 2017, 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 preliminary results for Q4-2017 as well as for the full year, indicating continued improved performance for the company, as XTB continues to recover from what was a very slow start to the year.

XTB reported its third consecutive quarter of improving results, with Revenues in Q4 up slightly over Q3. Q4 Revenue totaled PLN 75.5 million (USD $22.6 million), versus PLN 73 million in Q3. Both of those figures are well down, however, from the PLN 94 million which XTB brought in during Q4-2016.

XTB revenues Q4-2017

On the bottom line, XTB had a fairly good quarter with Net Profit of PLN 32.4 million (USD $9.7 million), again up slightly from 31.3 million in Q3.

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 nice pickup in client deposits during Q4, with Net Deposits of PLN 84.9 million (USD $25.4 million) up from PLN 56.8 million in Q3. However, both of those figures were down from the PLN 216 million XTB took in during the first half of the year, an average of PLN 108 million in each of Q1 and Q2.

Product-wise, XTB had a very interesting Q4 with virtually all of its Revenues being generated from Index CFDs – PLN 67.8 million, or more than 88% of XTB’s overall income. XTB actually took a loss in Currency CFDs during Q4.

XTB revenue by product Q4 2017

Geographically, clients in Central and Eastern Europe represent more than half (55%) of XTB’s revenues in Q4, including the company’s home market of Poland at 40% of Revenues. Western Europe accounts for 43% of activity. Management of XTB has stated that the greatest potential for business growth is in the German, French and Latin American markets.

XTB revenue by geo Q4 2017

Management changes

XTB underwent a change in senior management early last year. As was exclusively reported by LeapRate in January 2017, 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. The company then confirmed Omar Arnaout as its new CEO in late March 2017. Mr. Arnaout had been with the XTB group since 2007, starting as a Junior Dealer and working his way up the ranks since.

XTB went public on the Warsaw exchange in May 2016 at a valuation of about $350 million. However the company’s shares have drifted downward, trading now in the zl 4.90 range, down more than 50% from their zl 11.50 IPO price.

XTB shares took another hit late last year, despite the continued improving results, after it was revealed that the company was being investigated by Polish authorities for fraud and asymmetric slippage. XTB has denied the allegations.

XTB’s full Q4-2017 preliminary results report can be seen here (pdf).

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