Jumia says cost discipline and “selective” usage growth helped it cut first-quarter losses. The African e-tailer stated this in its Q1 2021 report.
The adjusted loss before interest, tax, depreciation and amortization for Jumia narrowed to €27 million, compared with a loss of €33.7 million in the first quarter of 2020. The average order value slid 16% to 24.9 euros. However, Jumia’s first-quarter revenue was €27.4 million, a 6% drop from the €29.3 million that it reported in Q1 2020.
In addition to declining losses, Jumia had other positive metrics to share. The giant e-tailer saw its active customer base grow 7% year-over-year to 6.9 million. And orders also increased by 3% to 6.6 million, a reversal of the declining trend observed over the preceding two quarters. The firms’ gross profit also reached €20.4 million in 2021, representing a year-over-year gain of 11% from €18.4 million in Q1 2020.
However, Gross Merchandise Value (GMV) was €165.0 million, a 13% decrease from the €189.6 million it recorded in Q1 2020.
For this decline, Jumia cited three reasons. One was the currency devaluation of Nigeria’s naira, Egypt’s pound, and Kenya’s shilling against the euro. According to the company, the trio dropped 15%, 9%, and 19%, respectively, against the euro in Q1 2021. Second, the company’s best-performing product category (phones and electronics) did poorly. In Q1 2020, those items accounted for 45% of its GMV volume, which fell to 37% this quarter. And third, the effects of the COVID-19 pandemic with countries reinstating some movement restrictions such as Morocco tightening their curfews measures or Kenya imposing localised lockdowns in late March.
The company adds that these measures did not lead to meaningful changes in consumer behavior but instead created supply and logistics disruption, especially for its food delivery business where dinner deliveries were affected by curfews in these countries.
JumiaPay, the payments arm of the company, continued to post modest growth. This time last year the product processed 2.3 million transactions worth €35.5 million. In Q1 2021, JumiaPay transactions rose 6.7%, to 2.4 million transactions on a year-on-year basis. The recent quarter’s total payment volume also grew 21% to €42.9 million.
Per cash position, at the end of March 31, 2021, Jumia said it had €485.6 million of cash on its balance sheet. This includes approximately €205 million of the total gross proceeds from the offering completed on March 30, 2021, with a remaining €88 million of cash booked in April 2021.
Commenting, Co-Chief Executive Officers of Jumia Jeremy Hodara and Sacha Poignonnec said: “Our first-quarter results reflect solid progress towards profitability. The drivers remain consistent: selective and disciplined usage growth, gradual monetization, and continued cost discipline. The first quarter of 2021 was the sixth consecutive quarter of positive gross profit after fulfillment expense, which reached €6.2 million, more than doubling year-over-year, while Adjusted EBITDA loss contracted by 24% year-over-year, reaching €27.0 million.
“Our strategy to increase our exposure to everyday product categories continues to yield positive results, enhancing the relevance of our marketplace for consumers. We are making further inroads in payment and fintech with 37 % of Orders in the first quarter of 2021 completed using JumiaPay.
“Last but not least, we have raised over $570 million over the past six months, strengthening our balance sheet and increasing our strategic flexibility. We are confident we have all the right ingredients to continue to build a growing business across both our e-commerce and fintech activities.”
