Jumia records $20m operating loss in 2024 Q3

• Published On: 08 November 2024 at 16:46

Jumia Technologies, Africa's leading e-commerce platform, reported a challenging third quarter ending September 30, 2024, with an operating loss of $20.1 million.

The company, which has been in business for 12 years, revealed the findings in a financial report released on Thursday.

The e-commerce behemoth attributed the loss to persistent macroeconomic pressures, which have continued to dampen consumer demand and raise operating costs in its markets.

Jumia also reported that the current quarter's performance was slightly lower than the $18.3 million operating loss recorded in the same period last year (Q3 2023).

Despite the challenging market conditions, Jumia remains committed to its long-term strategy of growth and sustainability in the region.

Despite a 13% year-over-year revenue decline to $36.4 million, Jumia demonstrated resilience in constant currency, increasing revenue by 9% and gross merchandise volume by 29% over the previous year.

The company reported an adjusted EBITDA loss of $17 million, a 15% increase over the $14.8 million loss recorded in the same quarter of 2023.

Jumia continued to take strategic steps to strengthen its financial position, including raising an additional $71.8 million through an at-the-market offering in August.

Jumia's liquidity increased to $164.6 million as a result of this boost, highlighting the company's focus on navigating economic headwinds while stabilising its finances.

Speaking, CEO Francis Dufay said, "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 on year, and orders, up 4% over the previous 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."

The CEO stated that the company took several significant operational steps during the quarter, including improvements to our logistics network and consolidation of our warehouse footprint to enable greater efficiencies and increase supply capacity.

While these changes had a negative impact on operations and expenses in the third quarter, he stated that the company believes that these efforts position us well for scaling and driving profitable growth as we expand our footprint beyond the major cities ("upcountry").

"We also recently decided to close operations in South Africa and Tunisia in order to focus our resources on markets with higher 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."