In a challenging quarter marked by substantial financial losses, Jumia Technologies AG (NYSE: JMIA), the pan-African e-commerce giant, has reported its Q2 2024 financial results. Despite a notable increase in orders, the company continues to struggle with profitability, highlighting the complexities of operating in the diverse and often unpredictable African market.
The company reported a mixed financial performance for the second quarter of 2024. Revenue for the quarter stood at $36.5 million, reflecting a 17% decline compared to the same period last year. However, when adjusted for constant currency, revenue showed a 15% increase.
The Gross Merchandise Volume (GMV) was $170.1 million, marking a 5% year-over-year decline. Despite this, in constant currency terms, GMV surged by 35%. The company’s operating loss was $20.2 million, an improvement from the $22.1 million loss recorded in the second quarter of 2023, showing an 8% decrease year-over-year and a 5% decrease in constant currency.
The company reported an operating loss of $20.2 million, an 8% improvement year-over-year or a 5% decrease on a constant currency basis, primarily reflecting cost reductions. Loss before income tax from continuing operations was $22.5 million, down 27% year-over-year, driven by cost savings initiatives and decreased finance costs, largely due to a reduction in net foreign exchange losses compared to Q2 2023.
Finance costs for the quarter were influenced by losses recognized on the sale of financial assets, highlighting varying financial factors affecting performance. Excluding the impact of foreign exchange, loss before income tax from continuing operations was up 1% in constant currency
As of June 30, 2024, Jumia’s liquidity position was $92.8 million, comprising $45.1 million in cash and cash equivalents and $47.7 million in term deposits and other financial assets. This represents an $8.7 million decrease in Q2 2024, compared to a $39.1 million decrease in Q2 2023 and a $19.1 million decrease in Q1 2024. The improvement in cash management reflects Jumia’s ongoing efforts to preserve cash resources while executing its growth strategy. As of Q2 2024, 67% of the company’s liquidity was held in USD, indicating a refined cash repatriation strategy.
Net cash flows used in operating activities amounted to $8.4 million, a substantial reduction from the $19.5 million used in the same quarter last year. This highlights the company’s efforts in improving its cash flow management.
Commenting on the released report, Jumia CEO Francis Dufay said that the company achieved a 7% year-over-year increase in orders, while orders per customer, excluding JumiaPay app orders, which do not incur logistics costs, rose to 2.1. Gross Merchandise Volume (GMV) saw a 35% year-over-year increase in constant currency. Additionally, GMV growth in reported currency was observed in six countries, up from five in the first quarter, underscoring the resonance of Jumia’s value proposition with African consumers.
Jumia’s quarterly cash burn declined significantly by 55%, or $10.4 million, quarter-over-quarter to $8.7 million. This improvement was driven by disciplined cost management and reductions in finance costs. Marketing spends decreased by 19% year-over-year as the company focused on proven channels such as CRM, SEO, and local offline channels. These strategic investments contributed to a 6% sequential increase in active customer count and continued improvements in the 90-day repurchase rate.
“Our performance this quarter reinforces our belief that our strategy is working,” said Francis Dufay, CEO of Jumia. “Our deep understanding of the African e-commerce market, combined with our unique asset base and strategic approach, positions Jumia for growth as we progress on the path towards profitability.
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