XTB’s Profits Dive in Q3, Falling to Just $1m

After seeing soaring profits earlier this year that peaked in Q1, the latest tranche of statistics shows diving profits.

XTB, the recently listed brokerage on the Warsaw Stock Exchange (WSE), has reported its preliminary results for Q2 2016, having shown an across-the-board decline across key metrics on a YoY basis, per an XTB financial disclosure.

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Following a strong period of growth earlier this year back in Q1 2016, XTB has seen a pronounced decline in key measures. More specifically, during Q3 2016 XTB disclosed a total operating income of $10.9 million (PLN 42.8 million), which was down -55.2% YoY from $24.4 million (PLN 95.7 million) in Q3 2015.

In addition, XTB saw its operating expenses stagnate in Q3 2016, after seeing a figure of $8.7 million (PLN 34.4 million) – this was virtually unchanged YoY from $8.7 million (PLN 34.7 million) in Q3 2015.

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The largest change across XTB’s financials came in terms of its net profit, which dove sizably to just $1.07 million (PLN 4.2 million) in Q3 2016, down -91.7% YoY from $13.0 million (PLN 50.9 million) in Q3 2015. This weakness was also seen across a different measure, with the first 9 months of the year showing a profit YTD of $7.0 million (PLN 27.3 million), compared to $26.1 million (PLN 102.5 million) in the year prior.

Account Growth

Despite this decline in financials, XTB has registered an increasing amount of active accounts with 16,984 as of Q3 2016, growing steadily from 15,399 in Q3 2016, or 10.3% YoY. New accounts were also on the uptick, swelling 19.9% YoY to 8,060 in Q3 2016, relative to just 6,723 accounts in Q3 2015.

According to a company statement: “The Management Board of XTB believes that increasing number of new and active accounts and a strong brand in combination with more favorably market volatility are solid foundations for future growth.”

XTB’s stock price (WSE:XTB) is trading down -22.0% on the release, falling to just $1.78 (PLN 7.0) per share in European trading.

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