Jumia’s Losses Mount

Jumia Technologies AG, Africa’s largest e-commerce platform, reported a challenging third quarter for 2024, with an operating loss of $20.1 million, a slight decline from the $18.3 million loss recorded in the same period last year.

The company’s Q3 results, disclosed on November 7, 2024, show a 13% year-over-year drop in revenue to $36.4 million. However, when adjusted for constant currency fluctuations, revenue rose by 9%, suggesting underlying resilience in Jumia’s core operations despite continued economic headwinds.

The revenue dip has been linked to the ongoing macroeconomic pressures that have weakened consumer demand across Jumia’s African markets. Persistent foreign exchange challenges in key markets such as Nigeria and Egypt have notably impacted financial performance, with gross merchandise volume (GMV) reaching $162.9 million, a marginal 1% decrease from last year, though it reflects a more positive 29% growth in constant currency terms.

The company’s operational metrics also reveal a wider adjusted EBITDA loss of $17 million, a 15% increase from $14.8 million in Q3 2023, underscoring Jumia’s ongoing struggle to reach profitability. Since its 2019 IPO on the New York Stock Exchange, the company has accumulated over $1 billion in losses, with its stock price plummeting roughly 70% amid stalled growth and mounting operational expenses.

In response to these financial challenges, Jumia has taken decisive steps to streamline operations and focus on high-potential markets. The company recently announced its withdrawal from South Africa and Tunisia, two markets with limited order volume and GMV contributions, citing intense competition and limited potential for growth.

Despite the financial losses, CEO Francis Dufay remains optimistic about Jumia’s future trajectory, emphasizing a renewed focus on strengthening the company’s underlying business model.

Dufay noted that quarterly active customers grew by 1% year-over-year, with a 4% increase in orders, reflecting continued consumer engagement despite economic difficulties. “Our focus is on bolstering the fundamentals,” Dufay stated.

The company’s liquidity position received a notable boost, reaching $164.6 million by the end of Q3 2024, a $71.8 million increase over last year, primarily driven by proceeds from an At-the-Market (ATM) offering completed in August. Net cash flows used in operating activities totaled $26.8 million for the quarter, up from $24 million in Q3 2023, impacted by negative working capital and one-time provisions linked to settlements.