The much awaited half year result of Rocket Internet, Jumia’s parent company has just been released showing the group made a net loss of USD617 million for the first half of the year, this is according to its result announced in Berlin.
The result further dampens the company’s prospect of quickly turning profit in its many eCommerce startup sub groups across Asia, Africa and Europe.
Giving a rationale for the negative result the company said in a note that:
”The result was primarily driven by impairments at Global Fashion Group S.A. (“GFG”). The financing round already announced in April 2016 resulted in goodwill and intangible asset write-offs at GFG subsidiaries. In total, GFG contributed negative EUR 383 million to Rocket Internet’s half year results”.
Another factor that warranted the loss was ”further impacted by special items such as impairments, fair value adjustments and to a lesser extent positive special items. As a result of deconsolidation of subsidiaries, consolidated revenue decreased in the first half of 2016 to EUR 29 million from EUR 71 million in the first half of 2016”.
Rocket Internet has not disclosed what it plans to do to ensure the second half of the year is better.
It would be recalled that AIG had rallied investors to raise additional EUR 330 million for GFG in order to ensure the sub-group remains afloat as a liquid going concern.
However, in June the company had dismantled AIG into Jumia, making all the services rendered by more than 10 eCommerce startups in Africa to be offered by Jumia, from a single domain with former companies now simply as additional services rendered by Jumia. To ensure Jumia regains liquidity, the company had raised GBP50 million from the CDC in July.
The result did not also state how Jumia’s result contributed to the negative bottomline. Investors will have to wait for the H1 2016 Results for Rocket Internet SE and Selected Portfolio Companies which is due for release on the 22nd of September 2016.