XTB’s operating profit increases by PLN 34.1 million in 1H 2017

XTB forex broker

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 announced its financial results for the first half of 2017.

The company has already issued last month preliminary Q2 results indicating improved performance for the company over what was a very slow Q1.

In the first half of 2017 consolidated operating profit (EBIT) increased by PLN 34.1 million, i.e. 183.0%, and reached PLN 52.7 million in comparison to PLN 18.6 million as compared to the same period of the previous year.

Net profit was PLN 29.4 million, compared to PLN 23.0 million in a previous year. That’s an increase of 27.8%.

The net result for the first half of 2017 was mainly shaped by the following factors:

  • 183,0% increase in operating result (EBIT) due to:

– the increase of 10.0% in operating income due to higher profitability per lot;

– improved cost-effectiveness, showing a decrease by PLN 22.7 million in operating costs;

  • factors not related to core operational activities, ie:

– creation of impairment write-down of separate intangible assets in the form of a brokerage license in the Turkish market in amount of PLN 5.6 million;

– occurrence of negative exchange rate differences (finance costs) in the amount of PLN 12.2 million (I half of 2016: PLN 2.9 million) as a result of zloty strengthening against other currencies.

Operating revenues increased by 10.0% and reached PLN 125.2 million in the I half of 2017 in comparison to PLN 113.8 million as compared to the previous year. From the structural side they have been shaped by an increase in profitability per lot with a comparable volume of transaction in CFD instruments in lots.

The XTB has a stable foundation for future growth in the form of a growing customer base. In the II quarter of 2017, the number of new accounts was the same as in the IV quarter of 2016, while in the I quarter of this year The Group reached the record number of new accounts. The total number of new accounts in the I half of 2017 increased by 68.3% over the comparable period. The average number of active accounts in the first half of 2017 amounted to 20 016, an increase by 22.8% y/y.

According to the Management Board, in the coming months a significant portion of XTB branches should maintain the increasing rate number of accounts that observed in 2017. Germany, France and Latin America have the biggest potential for business growth. Increasing accounts is not only the result of an optimized sales and marketing strategy, but also the result of product and technology development. The management continues to see great potential in technology and product development, which should help XTB expand its customer base and reach customers who have not previously been the Group’s main target customers.

Looking at the revenue structure for the classes of instruments responsible for their origins, more than half of revenue was generated on CFDs based on stock indices. The most important of these are CFD based on German and American stock indices (DE30, US500, US100, US30).

Geographically, XTB revenues were well diversified. Their growth has occurred in both Central and Eastern Europe and Western Europe. Countries where the Group derives more than 15% of its revenues each are: Spain (23.0%, decrease of share from 25.5%) and Poland (19.4%, decrease of share from 23.4%). The share of other countries in the geographic structure of revenues does not exceed in any case 15%. Latin America is also gaining on global relevance.

In the I half of 2017, XTB managed to significantly improve cost-effectiveness compared to the same period of the previous year, while maintaining growth in number of new accounts and number of active accounts. Operating expenses in the first half of 2017 amounted to PLN 72.5 million, a decrease by 23.8% y/y. This decrease was attributed to the lower by PLN 18.6 million y/y in marketing costs, mainly due to lower spending on advertising campaigns.

XTB recently underwent a change in senior management. 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’s full 1H-2017 results report can be seen here.

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XTB's operating profit increases by PLN 34.1 million in 1H 2017


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