XTB.com revenues down 7% in Q4 to $46M, profits down 32% to $17M
Poland based Retail FX and CFDs brokerage group XTB S.A. (WSE:XTB) has reported its financial results for Q4 and full year 2021, indicating that Q4 was slightly weaker on both the top and bottom line than Q3 at XTB, although still much improved from a very weak Q2.
Q4 revenues at XTB S.A., which operates the Retail FX and CFDs brand XTB.com as well as B2B services and tech arm X Open Hub, came in at PLN 183.6 million (USD $46 million), down 7% from Q3’s PLN 196.6 million. For the full year 2021 XTB brought in PLN 625.6 million in revenue (USD $154 million), down 22% from 2020’s PLN 797.8 million.
Profits in Q4 at XTB were PLN 68.9 million (USD $17 million), down 32% from PLN 101.5 million in Q3. For the full year 2021 net profit at XTB was PLN 238.3 million (USD $59 million), down 41% from PLN 402.1 million the previous year.
It will be interesting to see how XTB shares react when trading resumes on Wednesday morning on the Warsaw exchange. While Q4 was, as noted, not quite as strong as Q3, it was still a marked improvement over a very weak Q2 which spooked the markets. XTB shares took a 25% nosedive in late July after the group’s Q2 results were announced, and while the shares have crept back somewhat at PLN 16.57 (Tuesday’s close), XTB shares are still 21% below their 52 week high of PLN 20.90, and 35% off from their all time high set in mid 2020.
Despite the decrease in revenues and profits versus 2020, XTB said that 2021 was a period of “dynamic business development”, entering new markets and building a client base. As a result, the group acquired a record 189 thousand new clients, compared to 112 thousand a year earlier. This translated into a significant increase in the volume of clients’ trading on CFD instruments expressed in lots – an increase from 3.2 million to 4.1 million lots, i.e. by 29.3% y/y. XTB added that new client acquisition continued nicely into 2022, with approximately 18,000 new clients signed in January 2022.
For the full year 2021, XTB reported client CFD trading volumes of $1.737 trillion – an average of $145 billion in monthly volumes. Monthly CFD volumes in Q4 averaged more than $160 million.
In terms of asset mix, XTB’s revenues generated from commodity CFDs led in 2021. Commodity CFDs represented 49.3% of Revenues in 2021, versus 33.0% a year earlier. This is a consequence of high profitability on CFD instruments based on quotations of gold, natural gas, oil and silver prices. The second most profitable asset class was indices based on CFDs. Their share in the revenue structure in 2021 was 32.8% (2020: 53.2%). The most profitable instruments in this class were CFDs based on the US 100 index, the German DAX share index (DE30) and the US 500 index. Revenues on CFDs based on currencies reached 12.5% of all revenues, compared to 11.5% a year earlier, where the most profitable financial instruments in this class were based on the EURUSD currency pair.
XTB said it places great importance on the geographical diversification of revenues, consistently implementing the strategy of building a global brand. The only country from which the group derives more than 20% of revenues is Poland, with a share of 33.5% (2020: 37.0%).
In terms of segment revenues, nearly all of XTB’s revenues derive from Retail activities. Just PLN 2.0 million of the company’s PLN 625.6 million in 2021 revenues came from the group’s institutional arm, X Open Hub.
In August 2021, the group’s subsidiary XTB Africa (PTY) Ltd received a license to operate in South Africa. Due to the prioritization of tasks, the intention of the Management Board is to start operating on this market not earlier than in the second half of 2022.