Jumia yet to turn to profitability, reports 6.4% decline in Q1 revenue

AFRICA – The New York Stock Exchange listed Africa-focused eCommerce company, Jumia has posted first-quarter revenues of €27.4 million (US$33m), a 6.4% drop from the €29.3 million (US$35.3m) that it reported in Q1 2020.

Interestingly, Jumia seems to have generated more revenue during the period under review from third party sales at US$24m compared to US$23m in Q1 2020.

But the gains were wiped out by first-party revenue declining by 35% from US$12m in Q1 2020 to US$8m in Q1 2021.

According to reports by Tech Cruch, the eCommerce giant registered an operating loss for Q1 2021 to €33.7 million (US$40.7m), while its more forgiving adjusted EBITDA loss stood at €27.0 million (US$32.6m). The two fell by 23% and 24%, respectively, on a year-over-year basis as the company continues its slow march toward profitability.

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For the past few years, Jumia has almost always reported losses in its quarterly and annual results.

In late 2019, it supposedly began an aggressive push towards profitability, and the result has been a mixed bag of dwindling revenues, GMVs, and losses.

Encouragingly, Jumia’s gross profits after fulfillment expenses have been positive, and it continued that trend by recording US$7.5m in Q1 2021, up 149.5% from US$3m in the same period in 2020.

“Our first-quarter results reflect solid progress towards profitability. The drivers remain consistent: selective and disciplined usage growth, gradual monetization, and continued cost discipline.

“The first quarter of 2021 was the sixth consecutive quarter of positive gross profit after fulfillment expense, which reached €6.2 million (US$7.49m), more than doubling year-over-year, while Adjusted EBITDA loss contracted by 24% year-over-year, reaching €27.0 million (US$32m),” said Co-CEOs Jeremy Hodara and Sacha Poignonnec.

In addition to falling losses, Jumia had other positive metrics to share. The giant e-tailer saw its active customer base grow 7% year-over-year to 6.9 million.

Orders also increased by 3% to 6.6 million, a reversal of the declining trend observed over the preceding two quarters.

“The first quarter of 2021 was the sixth consecutive quarter of positive gross profit after fulfillment expense, which reached €6.2 million (US$7.49m), more than doubling year-over-year, while Adjusted EBITDA loss contracted by 24% year-over-year, reaching €27.0 million (US$32m).”

Co-CEOs Jeremy Hodara and Sacha Poignonnec

However, the total worth of goods sold via Jumia this quarter (GMV) was just €165.0 million (US$199m), a 13% decrease from the €189.6 million (US$228m) it recorded in Q1 2020.

Jumia cited two reasons for this drop. One was currency devaluation of Nigeria’s naira, Egypt’s pound and Kenya’s shilling against the euro.

According to the company, the trio dropped 15%, 9% and 19%, respectively, against the euro in Q1 2021.

And second, the company’s best-performing product category (phones and electronics) did poorly. In Q1 2020, those items accounted for 45% of its GMV volume, which fell to 37% this quarter.

JumiaPay, the payments arm of the company, continued to post modest growth. In Q1 2021, JumiaPay transactions rose 6.7%, to 2.4 million transactions on a year-on-year basis. The recent quarter’s total payment volume also grew 21% to €42.9 million (US$518m).

Jumia noted that most areas in Africa where it operates have lifted their lockdown restrictions, but some countries like Morocco and Kenya still have curfews.

The ecommerce giant said while these measures didn’t lead to meaningful changes in consumer behaviour, its supply and logistics chain — especially for its food delivery business JumiaFood — was disrupted.

To strengthen its balance sheet, Jumia raised more than US$570 million over the past six months.

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