XTB Profit Increases Sixfold in 2020, Revenues Up 300% YoY

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2020 and the full fiscal year ending on December 31, 2020, showing one of its most successful corporate earnings seasons.

Compared to a subdued performance during the previous year, where the industry players were broadly still feeling the pinch of change in ESMA regulations, XTB saw a surge in trading activity on the back of financial market volatility due to coronavirus. This surge has driven higher levels of customer trading activity and an increased rate of new customer acquisition.

More specifically, during Q4 of 2020, XTB disclosed a total operating revenue of $37.5 million (PLN 140 million), which compared well against the $23.4 million (PLN 89.57 million) in Q4 of 2019 or up 55 percent year-over-year.

However, this positive metric was offset by a surge in operating expenses which rose sizably by more than 76 percent to PLN 83 million from PLN 47 million in the previous year. As a result, XTB’s net profit rose mildly by 8 percent to $10.8 million (PLN 40.5 million) in Q4 of 2020 from the $9.7 million (PLN 37.03 million) it earned in 2019.

Taking a yearly perspective, XTB’s metrics show impressive growth in 2020 compared to the year earlier, having reported its operating revenues at $213 million, or PLN 798 million, which was nearly three times higher than the PLN 240 million the company reported in 2019.

The most significant change across XTB’s financial results came regarding its yearly net profit, which jumped to $107 million (PLN 402 million), which is up 600 percent when compared to $14.89 million (PLN 57.7 million) net profit a year earlier.

This inconsistent performance between QoQ and YoY metrics could be attributed to weak results in the first half of 2019, where the group posted only $1.34 million (PLN 5.2 million) in net profit.

The listed-broker noted that CFDs volumes have almost doubled to 3.2 million lots from 1.6 million a year earlier. Profitability per lot also increased for this asset class to PLN 251 from PLN 150 in 2019. However, on a quarterly basis CFDs profitability decreased from PLN 227 per lot in Q4 of 2019 to PLN 175 in the last quarter.

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XTB explained that its operating revenues were primarily influenced by the stock indices CFDs segment as the asset class generated 56 percent of the company’s total revenue. However, this figure ticked down as compared to 76 percent a year earlier.

The second most profitable class of assets were commodities CFDs, which saw their share in total revenues increasing to 33 percent from only 5.2 percent in 2019. Meanwhile, revenues from FX CFDs amounted to 11.5 percent of total revenues relative to 18.2 percent in 2019.

Finally, XTB registered an increasing number of active accounts with 72,346 as of Q4 of 2020, growing steadily from 30,815 in Q4 of 2019, or 140 percent year-over-year. Additionally, new accounts were on the uptick, swelling threefold year-over-year to 38,413 in Q4 of 2020, relative to just 10,424 accounts in Q4 of 2019.

XTB expects its marketing strategy to yeild more clients in the year ahead, referring to its recent partnership with José Mourinho, one of the world's best football managers, who has become its new brand ambassador.

XTB saw its shares shine earlier last year as the online Trading Platform operator doubled its operational and financial results, bolstered by the coronavirus-induced volatility.

“The significant factors determining the level of revenues were high volatility on financial and commodity markets caused by among others coronavirus COVID-19 global pandemic and a constantly growing client base combined with their high transaction activity noted in the number of concluded transactions in lots,” the listed broker said.

This inconsistent performance between QoQ and YoY metrics could be attributed to weak results in the first half of 2019, where the group posted only $1.34 million (PLN 5.2 million) in net profit.