African e-commerce group Jumia’s revenues slid by 10% in the second quarter, dashing hopes that lockdowns aimed at stemming the spread of the new coronavirus would lead to a flood of online orders.
Still, the loss-making company highlighted an 8% rise in orders and ongoing cost cuts that its co-CEO said pointed to a path to profitability.
Jeremy Hodara, the company’s co-CEO, told Reuters that the 26% drop in Jumia’s adjusted loss before interest, tax, depreciation and amortisation, a rise in gross profits per order, and higher orders of fast-moving consumer goods, showed the company was on the right track, despite coronavirus disruptions.
“We committed that we are going to show significant progress on our path to profitability. And that’s what we did,” Hodara said.
Jumia was the first Africa-focused tech start-up to list on the New York Stock Exchange and reached a market capitalisation of over $1.5 billion just after it went public in April 2019.
Revenue for the quarter fell to 34.9 million euros ($41.1 million). The company said while there were surges in demand in markets that went into total lockdown, this only happened in 24% of its adjustable market.
Softer restrictions elsewhere led to “less drastic changes in consumer behaviour”, Sacha Poignonnec, one of Jumia’s founders and its co-CEO, said, while the company also lost revenue due to logistical problems and closed borders.
“Things went back to normal sometime in (the second quarter),” Poignonnec said.
Jumia’s shares fell some 20% by 1628 GMT, to $12.76 per share.
Its share price on Wednesday was roughly 70% below last year’s peak, though it rose above $19 last week from a low of $2.33 in March.
The company also said it would pay $5 million to settle class action lawsuits alleging misstatements and omissions related to its initial public offering.