E-commerce giant Jumia reported $20.1 million in operating losses in the third quarter of 2024 as weak macroeconomic conditions in key markets continued to pressure revenues. Its operating losses rose by 10% compared to the previous year.
Jumia’s stock ($JMIA) is trading at $4.16 at the time of this report. Its market cap has taken a hit to $501.49 million, down from the $1.32 billion it reached in July 2024 off the back of renewed investor confidence.
The company’s Q3 2024 revenue fell to $36.4 million, compared to $45 million in the previous year. Its gross merchandise value (GMV), which accounts for total sales, was slightly down to $162.9 million.
Jumia said it made “major operational steps” including improving its logistics network and opening a new warehouse in Lagos, Nigeria in June 2024.
“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,” CEO Francis Dufay said.
The bright spot for Jumia is its liquidity position which improved to $164.6 million after it sold 20 million ordinary shares in August. Its embedded finance app JumiaPay also recorded 3 million in transaction volume as the company continues to bet on cashless payments.
“As we move forward, we are committed to taking a disciplined approach to managing our operations,” Dufay said. “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.”
The turnaround is a significant change for the company which seeks to become cost-efficient under its new leadership. Since 2022, CEO Francis Dufay has made drastic cuts to the business including layoffs, scaling back presence in underperforming markets, and shuttering its food delivery business. Those moves produced quick wins for the company, reducing its operating losses by 71% in Q1 2024. By Q2 2024, its losses fell by 8% year-on-year.
In October 2024, Jumia announced that it would exit its South Africa and Tunisia markets by the end of 2024 due to the poor performance of its businesses there. Those two markets accounted for a combined 2% of all customer orders placed on the platform, and 3% of GMV in the nine-month period that ended in September.
The company is refocusing its operations in its other nine markets. It could soon begin to sell off its assets in South Africa and Tunisia as it aims for cost-efficiency in its continuous bid to become profitable.
