Jumia Q2 results show signs of profitability driven by strong growth in payments

Jumia operating losses down by 44% Y-O-Y

Africa’s largest e-commerce operator, Jumia Technologies AG is showing signs of profitability as financial results for the quarter ended June 30, 2020, showed that operating loss decreased by 44 per cent year-over-year to €37.6 million, while gross profit after Fulfilment expense reached a record €6.0 million.

According to the report, the path to profitability is receiving a boost from the payment division, JumiaPay with transactions peaking at 2.4 million within the period, a year-over-year increase of 36 per cent, representing 35.6 per cent on-platform penetration in terms of orders.

Third Party Verification, TPV on JumiaPay reached an all-time high of €53.6 million, a year-over-year increase of 106 per cent, more than doubling on-platform TPV penetration from 9.9 per cent of Gross Merchandise Value, GMV in the second quarter of 2019 to 23.5 per cent of GMV in the second quarter of 2020.

Annual Active Consumers reached 6.8 million, a year-over-year increase of 40 per cent. Orders reached 6.8 million, a year-over-year increase of 8 per cent. GMV was €228 million, a year-over-year decrease of 13 per cent compared to GMV1 in the second quarter of 2019.

Gross profit reached €23.3 million, a year-over-year increase of 38 per cent.

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“Adjusted EBITDA loss reached €32.9 million, decreasing by 26 per cent on a year-over-year basis. Excluding a net expense of €3.6 million related to the class action settlement described below, Adjusted EBITDA loss would have been €29.3 million, decreasing by 34 per cent on a year-over-year basis,” Jumia said in a statement on Wednesday.

“We have made significant progress on our path to profitability in the second quarter of 2020, with Operating loss decreasing 44 per cent year-over-year to €37.6 million. This was achieved thanks to an all-time high Gross Profit after Fulfilment expense of €6.0 million and record levels of marketing efficiency with Sales & Advertising expense decreasing by 51 per cent year-over-year,” said Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.

“We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers, and communities.”