Jumia reported mixed results for the third quarter of 2024, with a 13% year-over-year drop in revenue to $36.4 million and an expanded operating loss of $20.1 million.
Nevertheless, the eCommerce giant’s cash reserves rose by 78% to $164.6 million, bolstered by a capital raise that supports growth initiatives despite economic challenges and withdrawals from select markets.
Key Financial Highlights for Jumia Third Quarter Results
Revenue and Gross Merchandise Volume (GMV): Jumia’s Q3 revenue of $36.4 million is a 13% decline from the previous year, though in constant currency terms, revenue actually rose by 9%.
Gross Merchandise Volume (GMV) similarly dipped by 1% year-over-year to $162.9 million, with a 29% increase in constant currency. These figures stress the impact of currency devaluations, notably in Nigeria and Egypt, which continue to challenge the company’s top-line growth.
Operating Loss and Adjusted EBITDA: The operating loss widened by 10% year-over-year to $20.1 million, while the Adjusted EBITDA loss grew by 15% to $17 million.
The increase is attributed to higher costs associated with operational adjustments, including warehouse consolidations aimed at future cost savings. In constant currency, the operating loss rose by 6%, and the Adjusted EBITDA loss by 10%.
Liquidity Surge: Jumia’s liquidity position surged to $164.6 million in Q3, a good increase from Q2’s $8.7 million decrease, bolstered by net proceeds of $94.7 million from an August 2024 At-the-Market (ATM) offering.
This capital raise was essential in strengthening Jumia’s cash reserves and is earmarked to support growth initiatives and operational improvements.
Expense Control: Fulfillment expenses rose to $10.3 million, a 5% increase year-over-year, due in part to one-time costs linked to warehouse consolidation.
Despite this, Jumia achieved flat year-over-year fulfilment costs per order at $2.40, a notable efficiency metric amidst the changes.
Meanwhile, general and administrative expenses (excluding share-based compensation) were up 14% to $17.6 million, reflecting costs that include the non-recurrence of a $6 million provision benefit seen in Q3 2023.
Cash Flow and Net Operating Activities: Jumia used $26.8 million in operating cash flow for Q3, up from $24 million in Q3 2023, due to factors such as a negative working capital impact from third-party sales cycles and a one-time $1.8 million provision settlement.
The company’s disciplined cash management remains a priority, evidenced by initiatives to simplify warehouse operations and invest in technology upgrades to enhance platform quality.
CEO Francis Dufay commented on the company’s strength, business fundamentals and market resilience even with macroeconomic pressures.
“In the third quarter, we continued to strengthen the underlying fundamentals of the business. We saw growth in both Quarterly Active Customers, up 1% year-over-year, and Orders, up 4% over the prior year, as we continue to focus on diversifying our supply and strengthening the Jumia value proposition. We are encouraged to see continued resilience in our usage and business fundamentals despite the significant first quarter currency depreciation headwinds in Nigeria and Egypt that continue to impact reported GMV and topline revenue.
We undertook several major operational steps in the quarter, including improvements to our logistics network and the consolidation of our warehouse footprint to enable greater efficiencies and increase supply capacity. While these changes negatively impacted operations and expenses in the third quarter, we believe that these efforts position us well to scale and drive profitable growth as we expand our footprint beyond the major cities (“upcountry”).
We also recently decided to cease operations in South Africa and Tunisia in order to better allocate our resources to markets with stronger growth potential. While these updates will have a near-term impact on our operations and financial performance, we believe that our efforts position the business well to scale on our path to profitability.
As we move forward, we are committed to taking a disciplined approach to managing our operations. The proceeds of our recent capital raise will help to accelerate our growth trajectory. However, we are committed to accelerating our strategy in a disciplined manner that avoids excess spending and will position the business for profitable growth over the long term,” Dufay said.
The company’s recent decisions to exit South Africa and Tunisia are strategic moves aimed at concentrating resources on higher-growth markets.
This approach is Jumia’s focus on scaling its operations profitably as it expands its footprint beyond urban centres.
With its bolstered liquidity, Jumia is thriving to improve operational efficiency and drive long-term growth.
