NAGA Group AG, a diversified financial services company specializing in retail forex/CFD and cryptocurrency trading, has reported a net loss of more than €37 million for fiscal year 2022. The figure represents a substantial increase compared to the loss of 10 euros from the previous year. million, according to the company’s consolidated financial statements. Despite these losses, there are some positives to the company’s financial performance.
NAGA, recognized for providing social trading services for FX and CFD instruments and brokerage services, saw an increase in its revenue for 2022. Revenue from its brokerage business increased to €57.5 million, up from €52 .8 million euros from the previous year. This marks a year-over-year improvement of approximately 9%.
Perhaps most notably, European clients contributed significantly to NAGA’s business revenue in 2022. They accounted for a staggering 90% of total revenue, marking a significant change from the more evenly distributed 54% seen the previous year. Of this European revenue, a notable 43% was generated in Germany alone.
However, as income increased, so did trade-related expenses. NAGA’s direct expenses increased to €14.3 million, compared to €8.7 million the previous year. Consequently, the group’s gross profit for the year amounted to 48.4 million euros, slightly exceeding the 45.7 million euros of the previous year.
The Hamburg-based group made efforts to reduce its marketing and advertising expenses, dropping them from €30.9 million to €28.3 million. However, despite these savings, NAGA ended the year with a negative EBITDA of €13.7 million, although this was an improvement on the previous year’s negative figure of €42 million.
In addition, the group amortized more than 15.3 million euros for the “amortization of non-current crypto assets.” This, combined with “depreciation”, resulted in an EBIT of €36.8 million. Despite the losses in 2022, NAGA managed to achieve a positive EBITDA of €4.2 million in the first nine months of 2023.
Looking ahead, the company’s executive board has outlined plans for declining group sales for fiscal 2023. However, they aim to offset this by improving efficiency in marketing and sales. The focus will be on moving from aggressive sales growth to generating stable and reliable profits. A key part of this strategy involves significant cost reductions, which the company hopes will visibly improve profit figures.
Earlier this year, the group raised $8.2 million in convertible bonds, but paid back $6 million last month through a loan from an unnamed institutional investor. The remaining amount of $2.7 million, along with interest, will be due on January 30, 2024.
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