Jumia Announces 43% profit growth in H1 2022

African e-commerce company, Jumia Technologies has announced its unaudited financial results for the second quarter (Q2) ended June 30, 2022 with $57.3million revenue, representing an increase of 43 per cent from $40.2million reported in second quarter ended June 30, 2021.

The company in a statement stated that the increase in revenue was driven by the strong growth in First Party revenue, which accelerated by 92per cent in the Q2 2022, on a year-over-year basis, and supported by the strong momentum in the Fast-Moving Consumer Goods (FMCG) and grocery sub-category in particular.

The statement said, “To support usage growth, we continue to deploy consumer incentives in the form of promotional discounts, which are accounted for as revenue deductions. Strategic use of consumer incentives on selected products or categories helps us drive conversion and is a core part of our strategy to scale the business towards profitability.

“Revenue is presented net of consumer incentives, which reached $8.2 million in the Q2 2022 compared to $4.5 million in the second quarter of 2021. Consumer incentives related to First Party revenue reached $2.0 million in the Q2 2022, compared to $0.9 million in the Q2 2021.

“We are currently focused on enhancing the efficiency of our promotional investments. The ratio of consumer incentives as a percentage of revenue has been improving sequentially from 18per cent in the fourth quarter of 2021 to 15per cent in the Q1 2022 and 14per cent in the Q2 2022.”

Jumia’s operating loss was $67.7 million in Q2 2022, up 31per cent year-over-year and 43per cent on a constant currency basis, as a result of operating expenses increases partly offset by gross profit expansion.

Commenting on the performance, the Co-Chief Executive Officers of Jumia, Jeremy Hodara and Sacha Poignonnec said, “We remain focused on scaling the business towards profitability. In the second quarter of 2022, we have successfully delivered on each building block of our path to profitability: usage growth momentum, monetization acceleration and cost discipline.

Despite a deteriorating macro environment, we maintained a strong pace of usage growth. Orders, Quarterly Active Consumers and GMV grew by 35per cent, 25 per cent and 21 per cent respectively, on a year-over-year basis.

“Leveraging robust usage growth, we further accelerated monetization. Gross Profit and Marketplace revenue were up 14 per cent and 17 per cent year-over-year respectively, the fastest growth rates of the past 5 quarters.

“In the context of rising inflation and input cost pressure, cost discipline remains a top priority for us. We drove usage growth and monetization acceleration with lower-than-expected marketing investments with Sales & Advertising expense of $41.0 million in the first half of 2022 compared to our guidance of $50-55 million.”

The statement added that, “We believe we are now past the peak of quarterly Adjusted EBITDA losses reached in the fourth quarter of 2021 and intend to redouble our efforts to reach profitability, leveraging our strong business fundamentals.

“We intend to reduce Adjusted EBITDA losses starting from the second half of 2022 with a 12 per cent to 29 per cent decrease year-over-year. We are confident our consistent and disciplined execution will help us reach profitability and build an even stronger and more relevant platform.”