Jumia Reduces Loss by 1% to $62.669m in First Half
Africa’s ecommerce giant, Jumia, loss after income tax declined by 1% year on year $62.669 million from $63.660 million, details from its unaudited financial statement for the first half of 2024 revealed.
In its presentation, the company said its loss moderated due to cost savings initiatives and a decrease in finance costs mostly driven by a decrease in net foreign exchange losses compared to the second quarter of 2023.
Jumia stated that the company’s finance costs for the second quarter of 2024 were mainly influenced by losses recognized on the sale of financial assets. The company said it remains committed to reducing its losses and accelerating its progress towards cash efficiency and profitable growth.
For the three months ended in June, Jumia reported 17% year on year decline in revenue which eventually settled at $36.5 million. Revenue declined to $85.281 million at the end of June 2024 from $85.367 million at the end of June, 2023.
The company noted the impact of US dollar movement in African market on its numbers. It said these revenue declined across commission, fulfilment value added services, marketing and advertising revenue were partially offset by increases in commissions from third-party corporate sales.
In Q2-2024
Jumia said first-party sales revenue was $16.1 million, according to Jumia, down 24% year-over-year, driven by lower first party corporate sales in Egypt, and the impact of foreign exchange.
The e-commerce company’s gross merchandise value (GMV) reduced by 5% year on year to $170.1 million at the end of first half of 2024, the results revealed. However, orders increased by 7% year-over-year.
The ecommerce company explained that the decline in GMV was impacted mainly by currency devaluations. The growth in Orders was driven by continued efforts to enhance and diversify Jumia’s product assortment as part of the increased focus on the customer value proposition.
Jumia said it continues to take a disciplined and targeted approach to marketing spend focused on targeting more efficient marketing channels, such as search engine optimization, customer relationship management and relevant offline local channels while also leveraging its JForce network.
As a result of these efforts, Jumia said the ecommerce company has continued to attracting a stickier and higher quality customer base as evidenced by a 262 basis point year-over-year improvement in repurchase rates in the first quarter of 2024.
Jumia’s cohort analysis indicates that 36% of new customers, who placed an order for a product or a service on its platform in the first quarter of 2024, completed a second purchase within 90 days.
This represents an improvement compared to 33% of new customers from the first quarter of 2023, who reordered within 90 days, management told investors conference.
The company’s gross profit was $21.6 million, down 6% year-over-year or up 35% year-over-year on a constant currency basis. Fulfilment expense amounted to $9.3 million, which represents 12% year-over-year decline from the amount recorded in the comparable period in 2023.
Sales and Advertising expense dropped by 19% to $4.4 million in the period. Technology and Content expense also dropped by 18% to $8.7 million. General and Administrative expense grew by 4% to $19.2 million in the period.
Jumia said its operating loss reduced by 8% to $20.2 million compared to $22.1 million in the second quarter of 2023. Also, adjusted EBITDA loss declined to $16.3 million in the first half of 2024, as compared to a loss of $18.2 million in the second quarter of 2023
The ecommerce giant said its loss before income tax from continuing operations settled at $22.5 million in the second quarter of 2024, down 27% year-over-year from the comparable period in 2023.
The company reported that liquidity position which came at $92.8 million, translating to decrease of $8.7 million in the second quarter of 2024 as compared to a decrease of $39.1 million in the second quarter of 2023.
Net cash flows used in operating activities slowed down to $8.4 million as compared to net cash flows used in operating activities of $19.5 million in the second quarter of 2023.
The company said its GMV improved 35% year-over-year in constant currency and delivered GMV growth in reported currency in six of countries in the second quarter, up from five in the first quarter of 2024, a sign that the Jumia value proposition continues to resonate with the African consumer.
“Our quarterly cash burn1 declined 55%, or $10.4 million, quarter-over-quarter to $8.7 million in the second quarter of 2024 as a result of disciplined cost management and reductions in finance costs.
“Year-over-year our marketing spend declined 19% as we continued to invest in proven channels, such as CRM, SEO and local offline channels. These efforts delivered a 6% sequential increase in our active customer count and continued improvements in our 90 day repurchase rate.
“Our performance this quarter reinforces our belief that our strategy is working. Our deep understanding of the African e-commerce market as well as our unique asset base and strategy position Jumia for growth as we progress on the path towards profitability.” – Francis Dufay, CEO said. PETAN Seeks Closer Ties with Aradel Holdings
