Jumia Reduces Pretax Loss by 52% to $99m

The leading pan-African e-commerce platform. Jumia, posted a 52% year-on-year decline in pretax loss to $99 million, according to its latest earnings release. The company’s annual revenue declined by 8% year-over-year to $186 million, according to e-commerce giant earnings released which showed that losses moderated.

In its 2023 financial statement, the company said its gross merchant value dropped by 20% year on year to $750 million as active customers and orders plunged as part of efforts to focus on priority categories.

According to the company’s earnings release, Jumia posted a $73 million operating loss in 2023, which is a 64% year-on-year decline compared to $202 million in 2022.

Details showed an EBITDA loss of $58 million compared to a loss of $182 million in 2022, representing a 68% year-over-year decline. For the full year, Jumia recorded $99 million as loss before Income tax from continuing operations, 52% below $206 million in 2022.

The e-commerce giant cash flow used in operating activities was $74 million compared to $240 million in 2022, down 69% year-over-year.

In the fourth quarter of 2023, the company’s gross profit gross profit reached $37.1 million in the fourth quarter of 2023.  Gross Profit as a percentage of GMV reached 16% compared to 15% in the fourth quarter of 2022, supported by improved margins and reduced spending on customer incentives and promotions.

Fulfilment expense amounted to $11.7 million in the fourth quarter of 2023, down 37% year-over-year and 16% on a constant currency basis. Fulfilment expense per Order, excluding JumiaPay app Orders (which do not incur logistics costs), decreased by 26% year-over-year from $3.2 in the fourth quarter of 2022 to $2.3 in the fourth quarter of 2023, reflecting a decrease of 2% on a constant currency basis.

“We are continuously seeking greater efficiencies in our logistics chain while improving the quality and reliability of our service and expanding our reach beyond the main urban centres”, the company said.

Sales and Advertising expenses amounted to $6.2 million in the fourth quarter of 2023, down 63% year-over-year and 49% on a constant currency basis. Jumia said it has continued bringing discipline to its marketing spending, while focusing on a strategy to improve core value proposition on physical goods, through price, selection and service.

Also, the company’s Technology and Content expense reached $9.9 million in the fourth quarter of 2023, down 28% year-over-year. General and Administrative expenses, reached $13.9 million in the fourth quarter of 2023, down 54% year-over-year.

It said administrative expense, excluding share-based compensation, reached $12.3 million in the fourth quarter of 2023, down 62% year-over-year and 54% on a constant currency basis. This decrease was primarily driven by a significant reduction in tax provisions, including a $9.0 million beneficial impact from a provision release during the quarter.

The staff costs within our General and Administrative expenses, excluding share-based compensation expenses, decreased by 17% year-over-year as management captured further efficiency gains through the organizational changes that have been implemented.

Operating loss settled at $4.5 million in the fourth quarter of 2023 compared to $44.7 million in the fourth quarter of 2022, decreasing by 90% year-over-year as a result of the significant cost reductions over the period.

The company’s loss before Income tax from continuing operations was $17.1 million in the fourth quarter of 2023 compared to $44.6 million in the fourth quarter of 2022, decreasing by 62%.

“As of December 31, 2023, our liquidity position reached $120.6 million comprised of $35.5 million in cash and cash equivalents and $85.1 million in term deposits and other financial assets. BUA Reduces Cement Price, Plans Further Review

“Our liquidity position as of September 30, 2023, amounted to $147.4 million, which marks a decrease of $26.8 million in the fourth quarter of 2023 compared to a decrease of $57.3 million in the fourth quarter of 2022, and a decrease of $18.9 million in the third quarter of 2023.

“Our liquidity position as of December 31, 2022 was $227.4 million, which marks a decrease of $106.9 million, in the year ended December 31, 2023, compared to a decrease of $285.4 million, in the year ended December 31, 2022”, Jumia said.

The e-commerce giant noted that the reduction in the pace of the decrease of liquidity illustrates its efforts to preserve available cash resources. It however added that Foreign exchange has been a significant headwind to its liquidity position, contributing a negative impact of $3.2 million in the fourth quarter of 2023 compared to a negative impact of $2.1 million in the fourth quarter of 2022.

“The negative impact of foreign exchange movements on our reported liquidity position amounted to $18.2 million in 2023 compared to $8.8 million in 2022”, it said in its earnings release. The company said net cash flows used in operating activities reached $10.3 million in the fourth quarter of 2023 down by 80% compared to the same period in 2022.

Jumia said a year-over-year decrease in Active customers and orders was driven by deliberate decisions to focus on priority categories and reduce customer incentives and free shipping expenditures.

Francis Dufay, Jumia’s Chief executive officer, said, “Looking at 2024, we are fully committed to bringing our business back to growth, while further reducing losses. We will continue to focus on our growth priorities in 2024, which are consistent with our efforts in 2023.

“In particular, we believe that there is still significant untapped potential for growth in all of our priority categories over the next several years. By executing consistently over time, we believe that we will be able to unlock a substantial amount of value.

“We look at the recent quarters as clear steps towards our strategic focus, positioning us for topline growth and improved cash utilization for 2024. With the macro situation in several of our African markets starting to recover, we are confident that Jumia has never been in a better position to capture the unique opportunity of e-commerce in Africa.”
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