African e-commerce giant Jumia today announced its earnings for the first quarter of 2021, which ended in March. While the number of customers increased, a decline in the company’s revenue suggested the company was still being hit by the effects of the COVID-19 pandemic.
Most of the areas in Africa where Jumia operates have lifted their lockdown restrictions, but some countries like Morocco and Kenya still have curfews. Jumia said while these measures did not result in significant changes in consumer behavior, its supply and logistics chain – particularly for the JumiaFood grocery store – was disturbed.
Jumia, which raised more than $ 570 million in the past six months to bolster its balance sheet, posted first quarter revenue of 27.4 million euros. This is a 6% decrease from the EUR 29.3 million reported in the first quarter of 2020. The operating loss for the first quarter of 2021 was € 33.7 million, while the more forgiving adjusted EBITDA loss was € 27.0 million. The two numbers fell year-on-year by 23% and 24% respectively while the company continues its slow march towards profitability.
Jumia has never made a profit, but its co-CEOs Jeremy Hodara and Sacha Poignonnec have made it clear in the past that the company wants to change that. This was also a point of reference in her investor comments today.
“Our results for the first quarter reflect solid progress towards profitability. The drivers remain consistent: selective and disciplined growth in usage, gradual monetization and continued cost discipline. The first quarter of 2021 was the sixth consecutive quarter with a positive gross profit after compliance costs, which reached € 6.2 million and more than doubled year-on-year, while the adjusted EBITDA loss declined 24% year-on-year and 27, € 0 million reached, ”they said in a statement.
In addition With declining losses, Jumia had other positive metrics to share. The huge customer base of the giant e-tailer grew by 7% to 6.9 million compared to the previous year. Orders also rose by 3% to EUR 6.6 million, which is a reversal of the downward trend observed in the two previous quarters. However, The total value of goods sold through Jumia this quarter (GMV) was just EUR 165.0 million, a decrease of 13% from EUR 189.6 million in the first quarter of 2020.
The company’s gross profit also reached € 20.4 million in 2020, an increase of 11% over the previous year’s € 18.4 million in the first quarter of 2020.
Jumia cited two reasons for this decline. One was currency Devaluation of Nigeria’s naira, Egypt’s pound and Kenya’s shilling against the euro, the reported currency. According to the company, the trio fell 15%, 9% and 19%, respectively, respectively, against the euro in the first quarter of 2021. And secondly, the company’s top performing product category (telephones and electronics) bad. In the first quarter of 2020, these items accounted for 45% of GMV volume, which decreased to 37% that quarter.
JumiaPay, the company’s payment arm, continued to show moderate growth. Around this time last year, the product processed 2.3 million transactions valued at 35.5 million euros. In the first quarter of 2021, JumiaPay transactions increased 6.7% year over year to 2.4 million transactions. The total volume of payments in the last quarter also rose by 21% to € 42.9 million.
According to the report, Jumia has expanded the functionality of its payment product. It now offers SMEs on the continent access to short-term loans by using business and transaction data from its sellers to pre-evaluate loans anonymously. The company said it disbursed 380 loans in the first quarter of 2021, up 90% from the first quarter of 2020. These loans were given on 291 sellers on its platform, a 62% increase over the number of sellers who accessed last year’s credits.
Jumia reported unlimited cash of EUR 485.6 million at the end of the first quarter of 2021. This includes gross proceeds of around € 205 million generated by the offer completed on March 30, 2021, and € 88 million in cash booked in April 2021.
Prior to today’s earnings call, Jumia was trading at $ 21.60 per share. Since the market opened this morning and at the time of this writing, the company’s share price has risen roughly 3.2% to just about $ 24.21. Investors appear to remain bullish about the company’s growth, particularly payments and plans to achieve profitability, despite continued operating and Adjusted EBITDA losses.