Retail FX and CFD broker with a focus on social media and copy trading NAGA Group AG (ETR:N4G) has published its annual report with the company’s audited consolidated financial statements for 2023.
In a challenging market environment, NAGA said it achieved a planned recovery in profits by making significant savings across all cost elements. With Group revenue of 39.7 million euros (2022: 57.6 million euros), The Group’s EBITDA improved to 8.4 million euros (2022: €-13.7 million).
The company said the deviation from the preliminary revenue reported by NAGA in early January 2024 is attributable to the reclassification of the income and expense balance from the NAGA coin (NGC) market to other operating income.
NAGA’s customer transaction volumes reached 143 billion euros in 2023, or about US dollars $13 billion in monthly average volumes.
On the cost side, the reduction in marketing and advertising expenses to €4.6m (2022: €28.3m) resulted in customer acquisition costs per trading account falling to the lowest level in the Company’s history at €380 (2022: €1,510). At the same time, the majority of non-financial key metrics such as active users, transactions and transaction volume were up year-over-year.
NAGA added that it was particularly pleasing that, despite lower new client business as a result of reduced marketing activities, user-related key metrics such as average activity, portfolio size and lifetime value showed strong upside trend. At around 8.4% (2022: 11.6%), the R&D ratio to revenue remained at a high level in the previous financial year 2023, reflecting in particular the expansion of the functions of Naga Trader, the NEO banking application NAGA Pay and the Naga X platform.
2022-2023 NAGA Group Highlights
| 2023 | 2022 | |
| Revenue in millions of euros | 39.7 | 57.6 |
| EBITDA in millions of euros | 8.4 | -13.7 |
| New accounts opened | 132,000 | 243,000 |
| Number of active users | 21,000 | 18,700 |
| Transactions in the millions | 9.2 | 8.6 |
| Duplicate transactions in the millions | 4.8 | 3.5 |
| Transaction volume in billions of euros | 143 | 137 |
NAGA cost savings
The company reported that the improvement in EBITDA of approximately €22.2 million in absolute terms was achieved mainly through cost-cutting measures, which allowed all cost elements to decrease year-on-year. The greatest effect came from the targeted reduction of marketing and sales costs from €28.3 million in 2022 to €4.6 million in 2023. This resulted in customer acquisition costs – gross cost per new trading account – falling on average to €380 (previous year: €1,510).
The second highest absolute savings of around EUR 4.2 million were achieved through staff reductions, which reduced staff costs to EUR 6.5 million (previous year: EUR 10.7 million). The board said it would have liked to have avoided having to make that decision and the associated staff cuts. However, given the tense economic environment and the associated challenging financial situation, the company saw the need to reduce the number of employees, which means that at the end of the financial year 2023, NAGA still had 100 (previous year: 173) employees.
NAGA Acquisition by Capex.com
The NAGA Group is in the process of being acquired, through a reverse merger, by the shareholders of Capex.com, led by Octavian Patrascu, who has already been installed as CEO of NAGA. NAGA shareholders overwhelmingly approved the transaction in April, with final closing pending regulatory approval.
As a result of the merger, the core business of the future group in electronic brokerage will have five licenses on four continents. The planned regional expansion will be promoted in particular in the emerging markets of Latin America (LATAM), Middle East/North Africa (MENA) and Southeast Asia (SEA). With this strategic focus on non-EU markets, NAGA said it expects strong growth in trading revenue. In addition, the merged group will have two licenses for crypto services in Europe and the MENA region, creating a solid regulatory basis for the further expansion of this business area.
NAGA plans to release its preliminary results for the first half of 2024, as well as more details on its plans for the future, in a virtual Presentation for Capital Market Day will take place on July 11.
NAGA Group Annual Report 2023 you can download it here.