BY CHARLES ABUEDE & GRACE AIRHULE
Amid speculations of a proposed takeover bid of Jumia Technologies, Africa’s leading e-commerce company, by Zinox Group, which led to a spike in the share price to $6.90 on the New York Stock Exchange, the company has turned some positive numbers in the first quarter (Q1’22) with revenue up 44 percent year on year to $47.6 million.
Information on the Q1 2022 results seen by Business A.M., shows the strong revenue performance resulted from strong growth in first-party revenue, which grew by a 152 percent acceleration in the first quarter of 2022 on a year-over-year basis.
The company reported that marketplace revenue for the quarter reached $26.4 million, up 8% year on year,
Jumia, in its Q1 2022 financial statement published on its website, reported that its marketplace revenue reached $26.4 million in the first quarter of 2022, up eight percent year-on-year, and aided by strong momentum in value-added services and marketing and advertising revenue streams. Value-added service revenue on its own grew 49 percent year on year to $7.1 million, partly as a result of an increase in international logistics revenue, while the fulfilment revenue, on the other hand, went southward by seven percent to $8 million, during the period.
After recording $198.9 million in gross merchandise value (GMV) in the first quarter of 2021, Jumia reported a 27 percent year on year rise to $252.7 million in the first quarter of 2022, an indication of a 35 percent rise in constant currency despite FX headwinds which affected the performance of the GMV during the first quarter of 2022 where 10 countries’ currencies, out of 11, depreciated against the dollar.
In particular, the Nigerian Naira, the West African CFA Franc and the Moroccan Dirham depreciated by 9%, 7% and 6% respectively against the dollar, in the first quarter of 2022 compared to the first quarter of 2021.
The largest contributing category to GMV growth in absolute terms was food delivery, which increased by 61 percent year-over-year. The second-largest contributor was home and living, which increased by 24 percent year-over-year, and was the largest product category in GMV terms, accounting for 18% of GMV in the first quarter of 2022, supported by the robust growth in home appliances.
During the period, orders reached 9.3 million, up 40% year-over-year, the fastest growth rate of the last nine quarters. The growth trends by product category illustrate the success of the strategic focus on everyday product categories, supported by increased marketing investments. Also, the quarterly active consumers reached 3.1 million, up 29% year-over-year, supported by robust increases in both new and returning consumers.
Furthermore, Jumia’s total payment value increased by 37% year-over-year and 45% on a constant currency basis. Despite the FX headwind, TPV posted its fastest growth rate in dollar terms in the past 5 quarters, supported by the strong growth in GMV. On-platform penetration of JumiaPay as a percentage of GMV reached a new high of 28% in the first quarter of 2022 up from 26% in the first quarter of 2021 as it focused on increasing the penetration of JumiaPay in a disciplined and gradual manner.
Also, JumiaPay Transactions reached 3.2 million in the first quarter of 2022, increasing by 32% year-over-year, supported by accelerating volume growth across the business, in the food delivery category in particular. Overall, 34% of orders placed on the Jumia platform in the first quarter of 2022 were completed using JumiaPay, compared to 37% in the first quarter of 2021. Thus, the growth in JumiaPay Transactions via e-commerce and food delivery platforms outpaced the growth of JumiaPay app Transactions.
According to the first-quarter financial statement, the e-commerce giant recorded $27.7 million in gross profit, up by 13 percent and 19 percent in constant currency, supported by growth in market revenue. Similarly, the company considers gross profit as a net incentive from consumers and a growth investment which rose to $7.2 million in 2022 from $2.1 million in the same period last year.
Also, Jumia technologies operating loss was about $66.4 million, up 64% year-over-year and 69% on a constant currency basis. This was a result of an increase in growth investment in the form of customer incentives, and EBITDA loss was $55.3 million in the first quarter of 2022, up 70% year-over-year and 76% on a constant currency basis as a result of the increase in growth investments outlined above.
Commenting on the performance, Jeremy Hodara and Sacha Poignonnec, co-chief executive officers of Jumia, said, “We kicked off 2022 with very strong growth momentum, closing the first quarter with the highest GMV and Order growth rates of the past 9 quarters, up 27% and 40% year-over-year respectively. In parallel with accelerating usage growth, we continued driving platform monetization, with revenue growing by 44% year-over-year, which was also a 9-quarter high.
Looking forward, the CEOs said, “We remain focused on taking the business forward on our path to profitability, driving faster usage growth with improved levels of marketing efficiency. Sales & Advertising expenses per Order and as % of GMV decreased sequentially, both reaching their lowest levels in the past 4 quarters, at $2 per Order and 7.5% of GMV respectively. We are executing our strategy with discipline and consistency. Our focus continues to be on making Jumia a compelling destination for the everyday needs of African consumers and a growth engine for sellers and businesses in Africa and beyond.”
Therefore, as of the end of the first quarter, the actual cash position of $421.2 million comprised $88.7 million of cash and cash equivalents and $33.6 million of term deposits and other financial assets, the net decrease in cash & cash equivalents adjusted for FX effects and movements in term deposits and other financial assets, reached $78.2 million. Cash utilisation was affected by a working capital outflow of $23.4 million mostly due to the upfront yearly payment of hosting services and insurance fees as well as an increase in inventory relating to the uptick in first-party activity.