African e-commerce platform Jumia has reported its first quarter (Q1) earnings results, recording a $48.9 million revenue and a gross profit of $31.2 million, compared to $41.3 million and $24.9 million in the first quarter of 2023.
The company significantly reduced its operating losses by 70% after major cost-cutting measures that saw it trim advertising costs to $3.8 million, a 30% drop compared to Q1 2023
Jumia stated that its order and average order value (AOV) grew, with order growth in Nigeria and Ghana, despite volatile conditions. According to the CEO Francis Dufay, he noted that the company is off to a strong start to the year, following a transformational 2023. He added that disciplined expense management and streamlining of the company’s logistics network, reduced quarterly cash burn to $19.1 million from $22.0 million in the first quarter of 2023.
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Among other things, Jumia stated that lower customer discounts helped attract a more loyal and high-quality customer base.
Commenting on the first quarter report, he said,
“Jumia is off to a strong start to the year. Following a transformational 2023, we continued to execute against our strategic priorities focused on strengthening our core business and improving cash efficiency while establishing a leaner organization primed for growth. Our efforts drove a 5% year-over-year and 39% constant-currency improvement in GMV in the quarter, while order growth and AV also expanded, a clear sign that our strategy is working. Disciplined expense management and further streamlining of our logistics network reduced our quarterly cash burn(I) to $19.1 million from $22.0 million in the first quarter of 2023.
“Efforts to orient spend toward more efficient marketing channels along with reductions in customer discounts also helped attract a stickier and higher quality customer base, driving a 300 basis-point improvement in repurchase rates versus the prior year. Our success is more notable when considered against the challenging macro environment in Africa. Significant currency devaluations in some of our largest markets impacted both purchasing power and supply availability, making for a difficult operating environment.
“However, our ability to secure sufficient inventory and offer a diversified product assortment at competitive prices continues to keep consumers engaged on our platform. Importantly, we are also beginning to see early signs of general stabilization in select markets, leaving us hopeful that conditions will continue to improve. For example, despite the volatile conditions, we are seeing order growth in Nigeria and Ghana, illustrating Jumia’5 value proposition. Additionally, in Egypt, the government floated the Egyptian pound and significantly increased interest rates, resulting in higher U.S, dollar inflows from foreign investors.”
Here is an overview of Jumia’s first quarter (Q1) 2024 report
•Revenue of $49 million, up 19% year-over-year, and up 57% in constant currency.
•GMV of $181 million, up 5% year-over-year, and up 39% in constant currency.
•Operating loss of $8 million compared to $28 million in the first quarter of 2023, down 71% year-over-year, and down 79% in constant currency.
• Adjusted EBITDA loss of $4 million as compared to a loss of $25 million in the first quarter of 2023, down 83% year-over- year, and down 94% in constant currencv.
•Loss before Income tax from continuing operations in the first quarter of 2024, was up 36% year-over-year and up 12% in constant currency largely driven by a $11 million increase in net foreign exchange losses
• Liquidity position of $101 million, a decrease of $19 million in the first quarter of 2024 as compared to a decrease of $22 million in the first quarter of 2023.
•Net cash flows from operating activities of $4 million as compared to net cash flows used in operating activities of $19 million in the first quarter of 2023.
Results highlights for the first quarter 2024
- Revenue of $49 million, up 19% year-over-year, and up 57% in constant currency.
- GMV of $181 million, up 5% year-over-year, and up 39% in constant currency.
- Operating loss of $8 million compared to $28 million in the first quarter of 2023, down 71% year-over-year, and down 79% in constant currency.
- Adjusted EBITDA loss of $4 million as compared to a loss of $25 million in the first quarter of 2023, down 83% year-over-year, and down 94% in constant currency.
- Loss before Income tax from continuing operations in the first quarter of 2024, was up 36% year-over-year and up 12% in constant currency largely driven by a $11 million increase in net foreign exchange losses, mostly without a cash impact, as a result of currency devaluations in Nigeria and Egypt and an increase in finance costs related to Jumia’s treasury and investment portfolio management activities.
- Liquidity position of $101 million, a decrease of $19 million in the first quarter of 2024 as compared to a decrease of $22 million in the first quarter of 2023.
- Net cash flows from operating activities of $4 million as compared to net cash flows used in operating activities of $19 million in the first quarter of 2023.