Breaking: XTB Shares Tank 18% After Drop in Profit and Revenues in H1 2016

Shares of publicly listed Polish brokerage XTB have dropped lower on rising costs and falling revenues.

Publicly traded Polish brokerage XTB has just reported on the outcome of the first half of 2016. The company’s key metrics have dropped somewhat according to the company, reflecting a period of lower market volatility and lower interest rates.

The company reported that its net revenues for the first half of 2016 have decreased by 12 per cent when compared to a year ago. The total number came out at $28.6 million (PLN 113.8 million), with operating costs amounting to almost $24 million, a figure which is higher by 46 per cent when compared to the first half of 2015.

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The higher costs are reflective of some changes to the institutional offering of XTB. Nevertheless in the first half of 2016 the average number of active accounts increased by 10.1 per cent, while the total number of accounts was higher by 25.6 per cent. Despite this, total trading volumes in the retail and institutional segments fell by 15.8 per cent, and net deposits by 6.3 per cent.

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Looking at the bottom line, net profits of XTB have declined by almost 47 per cent to $5.8 million (PLN 23 million), from almost $13 million a year ago.

Looking at the key performance indicators for the company we can highlight that the number of active accounts totaled 16,305, when compared to last year’s 14,806. The average revenue per user (ARPU) declined from $2,290 to $1,840 in the first half of 2016.

Shares of the company have tanked to all time lows of PLN 10.91 and are currently trading at the 10.93 mark. The value of the shares is lower by 18 per cent on the day and by 9.3 per cent when compared to the IPO price. The current market cap of XTB is close to $340 million.

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