African online retailer Jumia's losses narrow after cost cuts
Reuters
Published Feb 24, 2021 18:16
By Libby George
LAGOS, Feb 24 (Reuters) - African e-commerce giant Jumia
4JMAy.DE said on Wednesday its cost cuts helped it reduce
fourth quarter losses by 47% from a year ago as revenues
continue to slide, showing that its path to profitability was on
course.
Jumia, the first Africa-focused tech start-up to list on the
New York Stock Exchange, is selling fewer expensive one-off
products such as electronics and focusing on cheaper but
frequently ordered items like beauty and cleaning supplies. It
is also cutting fulfilment and advertising costs.
Revenue slid to 41.8 million euros in the fourth quarter,
down from 49.3 million euros in the 2020 period. But Jumia
reduced its adjusted loss in earnings before interest, taxes,
depreciation and amortization (EBITDA) to 28.3 million euros.
Co-CEO and founder Jeremy Hodara said this proved the
company's strategy was paying off. "We grew where we wanted to, and very efficiently," Hodara
said.
For the full year, revenue slid nearly 13%, to 139.6 million
euros and adjusted loss EBITDA fell by 34.5% to 149.2 million
euros.
Jumia outlined long-term hopes of expanding into new
markets, including Ethiopia, the Democratic Republic of Congo
and Angola, and said that payment platform JumiaPay and Jumia
Logistics could be spun off.
But Hodara said no such plans would be considered until the
company became profitable.
"We have to make sure that Jumia is a business that can make
money," Hodara said.
Jumia's share price was steady around $48 at 1550 GMT,
having gyrated dramatically since its listing at $14.50 on April
26 2019, valuing the firm at $1.1 billion. It hit a peak of
$49.77 shortly after listing but later plunged close to $2 a
share after a negative short seller report.
In December 2020, the company raised €203 million in a
primary offering.
Last year it also exited three countries and closed its
travel unit to focus on profitability.
($1 = 0.8244 euros)
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Written By: Reuters
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