NAGA recorded a heavy EBITDA loss in FY19, affected by adverse market conditions and a significant decline in revenues from services from Naga Development Association (NDAL). Preliminary Q120 figures show solid growth in sales and net income as the company benefited from high market volatility triggered by the COVID-19 pandemic and a lower operating cost base following the completion of group restructuring. The focus is now on expansion outside Europe, which it plans to finance with proceeds from a targeted €5m capital increase announced in June 2020.
EBITDA fell to a loss of €9.2m in FY19 (vs EBITDA of €0.3m in FY18) and the net loss was €13.4m (€4.1m in FY18) as lower operating expenses post restructuring (down 26% y-o-y) did not compensate for a significant drop in sales (brokerage sales and revenues from services were down 48% and 75% y-o-y respectively). In FY19, one-offs related to restructuring were €1.1m and it posted a €1.4m write-off of receivables from NDAL. When adjusted for restricted cash, net debt was €3.4m at end 2019 (vs net cash of €2.4m at end 2018). NAGA has received €5m funding from its core shareholder Fosun Fintech Holdings in recent months, including a €3.0m senior loan in November 2019 and a €2m convertible bond issued in January 2020 (both have a two-year maturity). It also secured €4.5m in a preplacement of a targeted €5m capital increase announced in late June, which is expected to close in July.
Preliminary figures report sales of €7.0m in Q120 (vs €0.6m in Q119) and net profit of €2.1m (net loss of €3.9m). Trading volume reached €47bn between end December 2019 and end May 2020, which already exceeds last year’s figure (€41bn). NAGA’s full-year guidance assumes significant growth in brokerage sales, coupled with a notable reduction in revenues from services after it decided to postpone works on NAGA Wallet and NAGA Exchange developed by NDAL. Consequently, NAGA expects higher EBITDA and net income in FY20.
NAGA’s share price increased to c €2.5 in early July 2020 after trading at all-time lows in H219 (c €0.6–1.0 per share over the period). Positive stock catalysts were solid Q120 results and strong trading figures amid high market volatility during the pandemic. NAGA trades at FY20 EV/sales of 5.3x and FY20 EV/EBITDA of 26.4x.