XTB posts 66.7% drop in net profit for Q1 2017, YoY, plans expansion in Latin America

XTB posts 66.7% drop in net profit for Q1 2017, YoY, plans expansion in Latin America

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The Polish online forex brokerage group X Trade Brokers Dom Maklerski (XTB) reported a 66.7% of its net profit for the first quarter of this year, compared to the same period of 2016.

According to the company data, the consolidated net profit for the period stood at PLN 10.6 million ($2.76 million), while in Q1 2016 it was PLN 31.9 million. The operating profit in Q1 2017 was PLN 22.2 million, in comparison to PLN 42.3 million in the same quarter of last year.

At the same time, however, the number of active client accounts rose by 26.9%. This trend, as well as the increase of the number of new accounts, is sustained from quarter to quarter and is driven by further penetration in existing markets.

In its report XTB notes that the results were mainly shaped by lower profitability per lot caused by high volatility of revenue in the short term. This is caused by the broker’s business model, which is characterized by high revenue volatility in a short term. “It causes that profitability per lot in particular quarters may be subject to significant fluctuations. It’s visible based on the results for 2016. The longer the analysis horizon (eg. the financial year), the more stable the results are”, XTB noted in its report.

Other factors include improved cost-effectiveness and occurrence of negative exchange rate differences.

According to the company statement, the plans of the management for the upcoming periods include further expansion of client base on existing market and accelerating geographical expansion into Latin American markets.

XTB was founded in 2002 and is now established in more than 15 countries in Europe, South America and Asia. It is the leading forex broker in Central and Eastern Europe. The broker provides online trading in over 1500 instruments, including forex, indices, shares, commodities and ETFs. It offers three types of live trading accounts and does not require a minimum deposit. Trading can be done on two platforms – the MetaTrader 4 and the broker’s proprietary xStation. The broker’s various subsidiaries are regulated by UK’s Financial Conduct Authority (FCA) and Poland’s financial supervision commission (KNF).

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