Publicly-listed Polish FX and CFD broker, X-Trade Brokers has released its preliminary Q4, 2018 and full fiscal year 2018 financial results, showing missing estimates and a huge drop in revenue.
In the final quarter of 2018, the decline was reported in both revenue and net income, but according to the latest preliminary report, key components of the business showed positive year-on-year growth.
In the fourth quarter of 2018, the total operating revenue during the period came in at $11.23 million (PLN 42.7 million), which is 44 per cent lower from over $20 million (PLN 76 million) in Q4, 2017. However, on a yearly basis, the total full-year revenue came in at $75.7 million (PLN 288.3 million), a gain of 5 per cent compared to PLN 274.6 million in the previous fiscal year. But, in dollar terms, due to the impact of foreign exchange rate changes the figure is lower year-over-year from over $82 million reported in fiscal 2017.
In terms of net profits during the final quarter of 2018, it dropped to $1.18 million (PLN 4.49 million), which is seven-times lower than what was posted in Q4, 2017 which was at PLN 37.6 million. On the yearly timeframe, the weak performance in Q4 is managed by the strong performance in the rest of 2018 and posted a net profit of $26.8 million (PLN 101.99 million), up nearly 10 per cent compared to PLN 92.9 million in the year prior. Apart from the local currency devaluation, the net profit is nearly $27.8 million lower compared to a year ago.
In terms of the average number of active accounts in Q4, 2018, the figure dropped during the quarter with only 20,568 active accounts, slightly down from 20,909 in Q4, 2017. New accounts were also down, falling 15.7 per cent lower year-over-year to 13,930 in Q4, 2018, to 16,530 accounts in Q4, 2017.
In the third quarter, XTB’s Q3 result was adjusted to reflect a one-off event, which was a result of the imposition of an administrative fine by the Polish Financial Supervision Authority (KNF). The regulatory agency imposed a penalty of PLN 9.9 million ($2.7 million) for “irregularities in the execution of client orders”, as per the statement from the regulator.
Despite the decline in trading volumes due to the implementation by ESMA of a 30x leverage cap on Forex and CFD trading, a number of new clients continued to grow with 16.3 percent year on year growth. New clients in Q3 totaled 4,884 and the average number of active clients higher by 11 percent year on year or 2014. 
XTB, the Polish forex broker has firmed up its plan to exit the Turkish market after it first indicated about the move to suspend business activities in the country in November 2017 due to the limitation to forex business enforced by Turkish regulator. 
