Social and copy trading focused Retail FX and CFDs broker The NAGA Group AG (ETR:N4G) has published its annual report with the company’s audited consolidated financial statements for 2023.

In a difficult market environment, NAGA said it achieved a planned turnaround in earnings by making significant savings in all key cost items. With Group revenues of €39.7 million (2022: €57.6 million), Group EBITDA improved to €8.4 million (2022: €-13.7 million).

The company said that the deviation from the preliminary revenues reported by NAGA in early January 2024 is attributable to the reclassification of the balance of income and expenses from NAGA Coin (NGC) market making to other operating income.

NAGA client trading volumes totaled €143 billion in 2023, or about USD $13 billion in monthly average volumes.

On the cost side, the reduction in marketing and advertising expenses to €4.6 million (2022: €28.3 million) 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 figures such as active users, trades, and trading volume were up on the previous year.

NAGA added that it is particularly pleasing that, despite the lower level of new customer business as a result of reduced marketing activities, user-related key figures such as average activity, portfolio size, and lifetime value showed a strong upward trend. At around 8.4% (2022: 11.6%), the research and development ratio in relation to revenues remained at a high level in the past financial year 2023, reflecting in particular the expansion of the functionalities of the Naga Trader app, the NEO banking app NAGA Pay and the Naga X platform.

NAGA Group key figures 2022-2023

NAGA cost savings

The company said that the improvement in EBITDA of around €22.2 million in absolute terms was achieved mainly through cost-cutting measures, which enabled all cost items to be reduced year-on-year. The largest effect resulted from the targeted reduction in expenditure for marketing and sales costs from €28.3 million in 2022 to €4.6 million in 2023. This caused customer acquisition costs – gross costs per newly financed trading account – to fall to an average of €380 (previous year: €1,510).

The second-highest absolute savings of around €4.2 million were realized through staff reductions, which reduced personnel expenses to €6.5 million (previous year: €10.7 million). The Management Board said it would have liked to have avoided having to make this decision and the associated personnel cuts. However, given the tense economic environment and the associated challenging economic situation, the company saw the need to reduce the number of employees, meaning that at the end of the financial year 2023, NAGA still had 100 (previous year: 173) employees.

NAGA acquisition by Capex.com

NAGA Group is in process of being acquired, via 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 back in April, with final closing pending regulatory approval.

As a result of the merger, the future group‘s core business in the online brokerage will have five licenses on four continents. The planned regional expansion is to be driven in particular in the emerging markets of Latin America (LATAM), the Middle East/North Africa (MENA), and South East Asia (SEA). With this strategic focus on markets outside the EU, NAGA said it expects strong growth in trading revenues. 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 Capital Markets Day presentation to be held on July 11.

NAGA Group’s 2023 annual report can be downloaded here.