PAN-AFRICAN E-COMMERCE JUMIA REPORTS INITIAL FULL-YEAR RESULTS POST NYSE INITIAL PUBLIC OFFER
African e-tailer company Jumia reports its first full-year output which saw the company decline (by a small amount) based on its gross profit, compared with fulfillment expenses, coupled with the expansion of its financial services but still posted losses.
The company having an online sales operations center in China is a potential source due to the coronavirus outbreak. Based on this, the Chief Executive Officer, ‘Sacha Poigonnec’ made it clear that “The online sales company, with an operations center in China, also anticipates some negative impact on 2020 growth from the coronavirus outbreak”.
Highlighted as Jumia’s fourth-quarter and full-year results, a decade after the company emerged the first venture capital supported startup in the continent of Africa went public on a major exchange.
Analyzing the outcome of 2018 – 2019, goods and services across 11 countries saw 2019 posted revenues of 160 million Euros which represent a growth of 24% of 2018. While on the other hand, the company’s annual active customer grew by 54% in the fourth quarter, which implies 6.1 million from 4.0 million for the same period last year.
Also, a contraction of 3% – representing 301 million Euros of the total amount of goods sold during the fourth-quarter was observed, which was attributed to as “business mix re-balancing” according to Poignonnec. Jumia also witnessed a contraction on the sales of electronics and phones, an impact on its Gross Merchandise Value (GMV).
Jumia’s ability to achieve a gross profit of 1.0 million euros after the deduction of its fulfillment expenses in the fourth quarter is considered the best post in the company’s 2019 performance. Based on this, the company reportedly had a 49% increase in orders from 5.5 million in fourth-quarter 2018 to 8.3 million in fourth-quarter 2019, specifically the same period.
The company’s losses widened 34% in 2019 to 227.9 million Euros, compared to 169.7 million Euros of 2018. And in this year the company has been profitable after fulfillment and hope to be profitable after marketing (expenses) the CEO noted.
Prior to the latest Jumia reports, it’s also understood the company has new and exciting services. While in 2019, Jumia suspended its e-commerce operations in three different countries – but the reason behind the suspension is best known to Jumia.
The company’s CEO ‘Poignonnec’ in this respect said “We believe those countries have…potential in the long-term but decided to allocate our resources to the countries that best support our long-term growth and path to profitability”.
Meanwhile, a new financial service aided by its big financial investors, Mastercard and Axa is currently under development, and also witnessed growth in its digital finance product – JumiaPay. The Axa money market fund product was launch in Africa’s most populous and economic country in 2019 coupled with other promotional programs on its Mastercard network.
JumiaPay service has increased significantly year-over-year, based on the fact that the company is committed to generating more revenue from higher-margin digital payment products, which sees JumiaPay as a unique and separate service across Africa.
The company’s share price saw the green light which equally plummeted after its April 2019 listing. This led to investor confidence being regained – doubling more than its $14.50 opening price post-Initial Public Offer (IPO).
- What is your take on Jumia reports of its full-year result?