African e-commerce firm Jumia says it is past peak losses, shares jump

Jumia Technologies AG

10/08/2022 17:38

By Bhargav Acharya
    Aug 10 (Reuters) - African e-commerce firm Jumia
Technologies  JMIA.N  said on Wednesday it was past peak losses
and would focus on promotions, marketing and cost cutting in its
quest towards profitability, driving its shares up 16% despite a
wider quarterly loss.
    Jumia is an online marketplace for vendors and food sellers,
with associated services including logistics and payments. It
was the first Africa-focused tech startup to list on the New
York Stock Exchange in 2019. 
    It reported an adjusted loss before interest, tax,
depreciation and amortisation of $57.2 million for the second
quarter ended June 30 from $41.6 million in the same period last
year.     
    The company did not say when it expected to make a profit,
but said achieving that would take a combination of measures
including promotional discounts, ramping up marketing and
cutting costs at warehouses by reducing consumption of
packaging.
    "There is not ... a silver bullet that will suddenly make it
profitable," Chief Executive Officer Sacha Poignonnec told
Reuters in an interview.
    The company, which operates in 11 African countries, saw
total orders increase 35% year-on-year as customers bought more
beauty and cleaning products.
    Jumia still expects a full-year adjusted EBITDA loss of $200
million-$220 million, but it reduced its full-year capital
expenditure guidance to $10 million-$15 million from $15
million-$25 million.
    Its quarterly active consumers rose 25% to 3.4 million,
while total revenue for the quarter reached $57.3 million, up
42.5%.
    Poignonnec brushed off possible competition from Amazon.com
 AMZN.O  after a news report said that it could make a foray
into countries including Nigeria and South Africa, markets where
Jumia has a presence.
    "If they were to enter those markets, ... it would be a
great validation of the attractiveness of e-commerce in Africa,"
he said.
    

 (Reporting by Bhargav Acharya in Bengaluru, additional
reporting by Ashwini Raj; Editing by Alexander Winning and
Emelia Sithole-Matarise)
 ((Bhargav.Acharya@thomsonreuters.com))