Nigeria’s largest eCommerce company by business value and coverage, Jumia said its losses further widened in the first quarter of 2018.
For the first quarter of the year, Jumia’s negative adjusted earnings before interest, tax, depreciation and ammortisation (gross losses) rose to EUR30.7 million which is approximately N12.5 billion on real-time currency exchange rate basis.
The result further shows that its losses rose by 29.5% on a year on year basis because it reported a negative adjusted EBITDA (gross losses) of EUR23.7 million in 2017 within the same quarter.
The result sure had some positives for Jumia. Gross revenue for the period rose by to EUR28.0 million compared to EUR19.2 million reported in 2017.
Rocket Internet, the parent company of Jumia said it in the report that “grew GMV to EUR 151 million in Q1 2018, a 70.9% increase over Q1 2017. With EUR 211 million pro-forma cash, Jumia remains well funded to develop its operations on the African continent.”
“In the first quarter of 2018, our selected companies continued to make progress on their path towards profitability, while demonstrating sustainable growth”, said Oliver Samwer, CEO of Rocket Internet.
Despite seeing increments in its quarter on quarter revenue, Jumia’s losses continue to increase which further dampens hopes that the company will enter profitability in 2019 as predicted by Kimpel, Rocket’s CFO. It is not clear how far the parent company will continue to pump more cash to bloat Jumia’s business.
Rocket had taken strategic steps to cut down Jumia’s losses by selling off business units that are virtually bleeding cash without commensurate revenue contribution.
Last month we did report that Rocket is planning to sell off its stake in Jumia via a planned IPO which is being planned for Paris. There are no confirmations on the rumoured IPO and when it is likely to hold.
Jumia is in direct competition with Zinox Group’s Konga, a smaller rival which recently merged its operations with Yudala, the parent company’s offline and online retailer which focused its core operations on its offline stores where it sells majorly consumer electronics and smartphones.
