The NAGA Group AG (ETR: N4G), which operates multiple divisions in the retail FX/CFDs trading and crypto, released its consolidated financial statements for 2022, disclosing a net annual loss of more than EUR 37 million. The figure deepened significantly from the previous year's loss of EUR 10 million.

The earnings per share of the group was at negative EUR 0.69 for 2022, down from the previous year's negative EUR 0.23.

NAGA Group's Diversified Business

Naga made its name by offering social trading services for FX and CFDs instruments, along with brokerage services. The group diversified its businesses by diving into areas like payments and cryptocurrencies. It also received a license from the Seychelles regulator last year to expand its business internationally.

According to the recently released report, last year NAGA's revenue generated EUR 57.5 million from EUR 52.8 million in the previous year from its brokerage business. This is a year-on-year improvement of about 9 percent. In addition, the company generated EUR 5.8 million from "capitalized programming services" contributing to a total yearly output of EUR 63.4 million.

The report highlights that in 2022, 90 percent of Naga's trading revenue originated from European customers, a notable contrast from the more balanced 54 percent seen in the previous year. Remarkably, an impressive 43 percent of the EU revenue was exclusively generated in Germany.

Meanwhile, NAGA's direct expenses related to trading revenues rose to EUR 14.3 million from EUR 8.7 million. Consequently, the group's gross profit for the year amounted to EUR 48.4 million, surpassing the EUR 45.7 million of the preceding year.

The Hamburg-headquartered group managed to reduce its marketing and advertising expenditure to EUR 28.3 million from EUR 30.9 million. After accounting for other factors, Naga ended the year with a negative EBITDA of EUR 13.7 million, a significant improvement compared to the previous year's negative figure of EUR 42 million.

Furthermore, the group incurred a write-off of over EUR 15.3 million for the "amortization of non-current crypto assets," which, along with "depreciation", lowered the EBIT to EUR 36.8 million. This marked a substantial increase from the 2021 EBIT of EUR 9.5 million.

Strong and Positive 2023 Outlook

Despite the losses in 2022, the Germany-headquartered company turned a positive EBITDA of €4.2 million in the first nine months of 2023, Finance Magnates reported.

"For the fiscal year 2023, the Executive Board is planning for declining Group sales, which will be more than compensated for by improved efficiency in marketing and sales. The focus will no longer be on aggressive sales growth, but on generating stable and reliable profits. Under the premise of significant cost reductions, the earnings figures are to be visibly improved," the report noted.

The group raised $8.2 million in convertible bonds earlier this year but repaid $6 million last month, taking a loan from an unnamed institutional inverter, and renegotiated to pay the remaining figures of $2.7 million with interest on January 30, 2024.