Key Take Outs From Rocket Internet’s H1 Result

Rocket Internet

Last Thursday, Rocket Internet SE, parent company of Jumia and other eCommerce verticals released its H1 result for all its key select portfolio.

While the company reported a net loss of EUR617 million, Jumia (formerly AIG) reported a net loss of EUR35.4 million. PageOne Markets Desk joined the analysts conference call from Berlin. Here are the key takeouts from RISE’s H1 result that will be of interest to you.

  • Rocket Internet’s group revenue is nearing EUR2 billion
  • The group was greatly impacted by FX losses in Brazil and Russia, including Nigeria
  • Food and groceries is Rocket Internet’s highest revenue earner- EUR188 million
  • Jumia’s revenue has been greatly impacted as a result of its change in business model from inventory to merchant based. The company now earns money from commissions instead of actual sales. Revenue fell to EUR43 million
  • Jumia cuts loss from EUR47 million to EUR35 million
  • GFG is the major contributor to its loss- EUR67 million. The company has finally divested from Jabong.
  • Mobile took about 60% of all sales on Lamoda
  • GFG has sold off Zalora in Vietnam and Thailand. Rocket Internet said it exited these markets because they lack prospects.
  • In its general merchandise division, Rocket Internet attributed Jumia’s loss to Nigeria’s macro-economic challenges which is the fall in global oil price. The company also cited the devaluation of the Naira (NGN) as a major impact on its bottom line
  • The change in business model from inventory model to marketplace model has impacted its revenue
  • To further position Jumia for profitability, all operations are now under one roof. The strategy will also enable the company to leverage all customers of each division.
  • During the period under review, three major divisions raised funds. GFG raised EUR330 million, Home24 EUR20 million, Linio EUR50 million, Rocket Internet did not participate in Linio’s rounds and its stake in the business has been further diluted below 5%. Rocket Internet will henceforth stop reporting on Linio.
  • Total cash position at Rocket Internet SE is EUR1.7 billion as at the end of August, 2016.
  • Going forward, Rocket Internet plans to further reduce operational complexity such as the un-bundling of AIG
  • The company does not report Delivery Hero as part of its overall result. Peter Kimpel claimed it only reports Delivery Hero ‘periodically’.
  • Rocket Internet said it is not expecting further impairments (write down) in Q3. RISE is not also expecting to engage in further funding rounds in 2017.