XTB Reports Increasing Accounts but Declining Revenues in 2016

Polish publicly listed brokerage XTB reported on the final outcome for the company last year.
Photo: Bloomberg, Logo of the Warsaw Stock Exchange

Polish brokerage XTB, whose shares are listed on the Warsaw Stock Exchange, reported its final outcome for 2016. Despite increasing new and active account numbers, lower volatility throughout the year led to a decline in the company’s revenues and profits.

During 2016, the Polish brokerage reports its operating revenues at PLN 251 million ($62 million). The figure is 11 percent lower than for the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) declined 40 percent to PLN 87.5 million ($22 million).

Consequently the XTB’s bottom line for 2016 amounts to PLN 77.7 million ($19.5 million), a number which is lower by almost 35 percent when compared to last year’s.

xtb
Source: XTB

Declining Volumes Despite Rising Trading Accounts

The decline in operating revenues and profits comes after the firm marked an increase in both active accounts and new accounts. New clients of XTB were reported at 31 283, which is a notch higher than last year’s numbers. Average active accounts increased 14.3 percent when compared to 2015, coming in at 17 207.

Trading volumes declined by 17.5 percent on a yearly basis to 2 015 655 lots. The biggest decline on a regional basis was in Central and Eastern Europe (-13 percent), followed by Latin America and Turkey (-12 percent) and Western Europe (-7 percent).

Lower trading volumes in the first three quarters of the year appear to be the main reason for the decline in trading volumes. The firm reports that average daily volumes in Q4 picked up as the post-US election boost across different asset classes changed the market’s outlook.

Institutional Business Segment Declines Sharply

XTB’s institutional business posted a material decline in key metrics. The company’s new accounts throughout the year were 17 when compared to 30 in 2015. The average number of active accounts remained stable at 36, (37 in 2015), but total trading volumes halved. Throughout last year the firm’s institutional clients marked 196 600 lots traded, when compared to 401 697 in 2015.

Net deposits in the sector amounted to PLN 4 million ($1 million). The segment appears to be drying out for the Polish brokerage, at a time when competition in the area is increasing materially.

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