XTB Posts H1 Results: Revenues and Profits Storm Higher, Led by CFDs

The latest financial results build on XTB's momentum earlier this year though headwinds remain for the brokerage.

Polish publicly listed FX and CFDs brokerage XTB has announced its preliminary results for the first half of 2017. For H1 of the fiscal year ending June 30, 2017, the group marked strong growth in revenues and profits, helped in large part by CFD trading. These gains build on an already successful Q1, with virtually all segments pointed higher.

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For H1 2017, XTB posted a total of $34.2 million (PLN 125.2 million) worth of revenues. The figure represents a growth of 10.0 percent year-over-year relative to $31.1 million (PLN 113.8 million) in the same period of 2016 on a constant currency basis. One of the biggest contributors to this figure was XTB’s growth in CFD instruments – this segment swelled by 44.8 percent in H1 2017, relative to the year prior.

The group’s latest revenues also corresponded to a decrease in operational costs for H1 2017. In particular, XTB posted operating expenses of $19.9 million (PLN 72.7 million) during this period, which declined from $26.0 million (PLN 95.2 million) in H1 2016, or -23.6 percent year-over-year.

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Moreover, XTB’s operational profit stormed higher to $14.4 million (PLN 52.6 million) in H1 2017 vs. just $5.1 million (PLN 18.6 million) in H1 2016, or +182.8 percent year-over-year. The brokerage’s net profit also rose to $8.1 million (PLN 29.5 million) in H1 2017, up 28.2 percent on a year-over-year basis from $6.3 million (PLN 23.0 million) in H1 2016.

Continued growth in account numbers

The brokerage also achieved a healthy growth in its trading accounts – in H1 2017, XTB’s number of active and new clients decreased materially when compared to a year ago. H1 2017 saw 22,195 new accounts added, besting a 2016 result of just 13,616 new accounts. This growth came in spite of a decrease in risk appetite and volatility, both of which have been confined to isolated pockets in H1 2017.

In terms of XTB’s average number of active accounts, this figure increased to 20,016 in H1 2017 from 16,196 a year ago, or +23.6 percent. These figures build on previous growth seen in Q1, which saw this segment perform strongly.

Moving forward, XTB’s business will be influenced by a number of different factors that were outside of its control. Earlier this year, the group’s CEO Omar Arnaout warned that 2017 would reflect a market consolidation. Additionally, regulatory changes in both Turkey and Poland itself loom as potential headwinds for the group’s H2 prospects.

Earlier this month, Polish regulatory authorities also unveiled a dramatic change to the retail space, mandating a maximum leverage for FX traders that will be cut to 1:25. The news came as a follow-up to a previous action taken by the Polish Financial Supervision Commission (KNF) in 2015, when it capped leverage at 1:100.

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