African e-commerce firm Jumia cuts Q1 losses but shares slip

Jumia Technologies AG

11/05/2021 16:33

By Libby George
    LAGOS, May 11 (Reuters) - African e-commerce firm Jumia
Technologies AG  JMIA.N  said on Tuesday that cost discipline
and "selective" usage growth helped it cut first-quarter losses
for the fifth consecutive quarter. 
    Jumia's chief executive, Sacha Poignonnec, said the 24%
narrowing in losses was evidence that its path to profitability
was on track. 
    Jumia, the first Africa-focused tech startup to list on the
New York Stock Exchange, aims to sell fewer expensive one-off
products such as electronics and more inexpensive, frequently
ordered items such as beauty and cleaning supplies. 
    The adjusted loss before interest, tax, depreciation and
amortization narrowed to 27 million euros ($32.85 million),
compared with a loss of 35.6 million in the first quarter of
2020. Average order value slid 16% to 24.9 euros.
    "All the work that we have done is paying off and we are in
a very good position to accelerate the growth," Poignonnec told
Reuters. 
    Jumia shares were down 5.1% at $22.27 in late morning in New
York, well below the all-time peak of $65.51 hit on Feb. 10.
    The shares have gyrated dramatically since listing at $14.50
on April 26, 2019. They rose shortly after listing to $49.77 but
later plunged close to $2 a share after a negative short-seller
report.
    Poignonnec brushed off the volatility and said the long-term
strategy would keep investors happy. 
    Jumia has raised more than $570 million over the past six
months, which Poignonnec said would be used for gradual
investments in core businesses, including improving payment
platform JumiaPay and other technology platforms and expanding
in existing markets. 
    Jumia warned that the COVID-19 pandemic could hit consumer
confidence and spending power. 
    While the pandemic boosted business for e-retailers in other
regions, such as Amazon.com Inc  AMZN.O  and Alibaba  9988.HK ,
Jumia's revenue fell due to 2020 lockdowns. It warned that
renewed curfews and lockdowns in countries including Morocco and
Kenya created disruptions, especially for food delivery
business.  urn:newsml:reuters.com:*:nL8N2FE4UT
 ($1 = 0.8220 euro)

 (Reporting by Libby George in Lagos
Editing by Matthew Lewis)
 ((Libby.George@thomsonreuters.com; +234 809 065 5059 ; Reuters
Messaging: libby.george@thomsonreuters.com))