XTB net profit skyrockets 214%, and 50% will be used for dividends
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Recently, the Management Board of a CFD and forex broker, XTB, announced its decision to use 50% of the company’s profits in 2022 as dividends for its shareholders. The company, listed on the Warsaw Stock Exchange, published that its estimated net profit for the past year is $171.6 million (761.6 million PLN). Furthermore, the Board also noted that it plans to use another 25% of the amount for the shares buyback program.
The Board’s next move is to pass the decisions to XTB’s Supervisory Board and General Meeting. Based on these figures, the company will set aside PLN 381.5 PLN ($86 million) for dividend payments at a price of $0.73 (3.25 PLN) per share. As for the other 25% meant for the repurchase of shares, that will include $42.5 million, or PLN 188.7 million.
According to recent reports, the company’s net profit skyrocketed in 2022, jumping by 214.4% to $171.6 million. Despite this, the broker still reported a notable profit slide in its preliminary quarterly financials for Q4 2022. In addition, the company’s operating revenue in 2022 hit a personal record of $325 million, which also represents a 125% surge compared to the year before, when its operating revenue was $144.2 million.
Finally, the company’s profits dedicated to repurchases and dividends only cover 75%, which leaves another $43 million (PLN 191.4 million). The firm said that this amount would be set aside as reserve capital.
XTB’s alternative plan
Moving on with its report, XTB noted that the recommendations would only be implemented if their request to repurchase 5.7 million (4.84%) of shares is granted by the Polish Financial Supervision Authority. The regulator needs to grant the request by December 31st, 2023, in order for the company to be able to move on with this portion of its plan.
Should the regulator fail to grant the request by that time or extends the time for considering and granting the request, the Management Board intends to recommend an alternative approach of using the 25% set aside for the repurchase. In that situation, these funds would also be used for dividends, meaning that 75% of the total profits would be granted to shareholders in this scenario.
If that ends up happening, the company would use roughly 570.5 million PLN ($128.5 million) in total dividend payments, which would translate to $1.09 (PLN 4.86) in dividends per share. It is also worth noting that this is a real possibility, as the Polish regulator recently dismissed a cessation appeal that XTB filed against the regulator’s decision to impose a financial penalty on the company in 2018.
