Africa’s online retailer Jumia has concluded the fourth quarter of 2024 in the red, failing to yet again attain profitability, after two years of brutally cutting costs.
Sales and Advertising expenses dropped 24%, while revenue tumbled to $45.7 million, down 23% year-over-year. Revenue declined beyond analysts moderate estimates of a 9% drop.
Currency devaluations and lower commissions from third-party corporate sales in Egypt severely impacted revenue generation efforts for the quarter. First-party sales revenue was $22.5 million, down 14% year-over-year.
“I am proud of what we have accomplished in 2024. We saw robust growth in secondary cities, expanded our supply from international sellers, and further improved marketing efficiency,” said CEO Francis Dufay who remained positive.
“As we look ahead to 2025, I am optimistic about Jumia’s future. The business is stronger and more efficient than it was just two years ago, and I believe we have a good opportunity ahead of us. Our priorities for the year are to build on this momentum by driving top-line growth and improving operational efficiencies.”
Key takeaways:
- Jumia’s reported revenue of $45.7 million for Q4 2024
- Operational losses grew to $17.3 million
- Quarterly active users grew to 2.4 million
The value of total orders (GMV) declined to $206.1 million despite the number of orders increasing 11% year-over-year to $7.4 million. Operating losses widened to $17.3 million, compared to $4.5 million in the same period last year.
Despite the bleeding results from all corners, Dufay’s 2025 strategy is driving top-line growth and improving operational efficiencies.
Jumia decided to close shop in South Africa and Tunisia by the end of December 2024 to concentrate on East and West African markets while expanding outside the main urban centres, and deepening relationships with international sellers. It is yet to be seen how effective this move will be in the long term. Jumia lost $10 million in the fourth quarter of 2024, as the termination expense associated with exits from South Africa and Tunisia.
This quarter, the Jumia attracted 2.4 million customers compared to 2.3 million in December 2023. It will continue to leverage low-cost acquisition channels involving radio jingles, SEO and CRM strategies to retain customers.
Jumia has taken several steps to improve its financial performance, including exiting non-core markets and raising capital through a secondary share offering. However, achieving profitability remains a significant challenge due to ongoing economic uncertainties.
Regarding cash efficiency, Jumia has a cash balance of $55.4 million and a liquidity position of $133.9 million. The company said the decrease in the fourth quarter of 2024 was primarily driven by an increase in operating costs, $1.3 million in market exit costs related to South Africa and Tunisia, negative working capital contributions of $13.5 million, and payments of $2.1 million in equity transaction costs associated with the August secondaries offering.
The only bright spot in the report is the growth in JumiaPay transactions which reached $3.3 million by December 2024, up 11% year-over-year. The growth was driven by increased penetration of JumiaPay on delivery in the fourth quarter of 2024. There are also ongoing efforts to streamline the user experience and the continued rollout of JumiaPay on delivery, positioning the payment arm as an enabler of the company’s e-commerce architecture
Over the past month, Jumia’s share price has grown 1.5%, demonstrating some level of shareholder confidence. The stock currently trades at $3.88 down 0.16% at the time of this report.
