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#1 30-10-2019 10:17:03

johnedward
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XTB: preliminary 3Q 2019 financial results

XTB: preliminary 3Q 2019 financial results


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Polish brokerage XTB released its preliminary financial results for the third quarter of 2019 earlier this week, revealing a strong overall performance.

It appears that XTB is beginning to recover from the damage caused by the ESMA's harsh regulatory measures, as the broker made a net profit of 15.52 million PLN during the third quarter. This figure is higher than the net loss of PLN 2.92 million recorded in the third quarter of last year.

During the quarter, consolidated sales amounted to PLN 62.0 million. This represents a growth of 28.1% compared to 47.1 million PLN of consolidated revenues in the third quarter of 2018.

Record number of new traders

This solid financial performance is attributable to the record number of new clients (10,041) joining the broker, up 105.5% year-on-year and 8.5% quarter-on-quarter.

The average operating profit per active customer in the third quarter was PLN 21,000. However, when compared to the same period last year, where the average operating profit per active customer was PLN 22 000, there is a slight decrease of 4.1% compared to the third quarter of 2019.

In the case of CFD (contracts-for-difference) trading, the broker also recorded a year-on-year increase in the third quarter with a total turnover of PLN 59.91 million, an increase of 26.71% since last year.

Currency CFDs contributed the most to revenue, with the instrument category accounting for 51.4% of total CFD trading, compared to 21.9% in the third quarter of last year.

Development of its institutional business

XTB is also focusing on diversifying its revenues. This is why the group is developing its institutional business (X Open Hub), in which it provides liquidity and technology to other banks and brokers. Turnover in this sector is subject to significant quarter-to-quarter fluctuations, as is the case for the retail trading sector, which is typical of the business model adopted by XTB.

Stable operational expenses

The Executive Board expects the operating expenses for the fourth quarter of this year to be comparable to those observed in previous quarters. The final level will depend on the elements of variable pay given to employees, the level of advertising expenses and the impact of interventions on products, put in place by the relevant regulators in the EU's local markets, on the level of revenue generated by the group. The level of marketing expenses will depend on the impact of the results and the profitability of the group and the reactivity of clients to the various ad campaigns. In addition, if the need arises, the impact of the regulators' interventions on XTB's turnover will, if necessary, revise the cost assumptions for this year's final quarter.

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