Economy
Jumia’s Q3 2020 Results Show Positive Rebound
Months of headwinds appear to be fading for African e-tailer, Jumia as its recently announced financial results for the third quarter ended September 30, 2020, have shown the company on a rebound and on its way to recovery.
Jumia, in Q3 2020, made “significant progress on the path to profitability” as evidenced by increased gross profit by 22 per cent year-over-year and decrease in the operating loss by 49 per cent year-over-year.
The firm’s payment platform, JumiaPay’s total payment volume (TPV) also increased by 50 per cent year-over-year, while annual active consumers reached 6.7 million in Q3 2020, up 23 per cent year-over-year, among other positive headlines in the quarter in review.
In more details, the financial results indicated that Jumia’s gross profit reached €23.2 million, a year-over-year increase of 22 per cent, while gross profit after fulfilment expense (GPAFE) reached €6.6 million, compared to a loss of €1.7 million in Q3 2019.
Sales & Advertising (S&A) expense was €6.2 million, the lowest quarterly amount since 2017 and a year-over-year decrease of 55 per cent. The e-commerce firm attributed this feat to a commitment to increase marketing efficiency as S&A expenses per Order decreased by 53 per cent from c. €2.0 in Q3 2019 to €0.9 in Q3 2020.
Jumia also for the first time at the group level, returned double positives in both GPAFE and S&A expenses, with the majority of countries breaking even at this level Q3 2020.
Operating loss reached a three-year low of €28.0 million, decreasing by 49 per cent year-over-year. JumiaPay TPV was €48.0 million, a year-over-year increase of 50%, more than doubling on-platform TPV penetration from 12.2 per cent of GMV in Q3 2019 to 25.6 per cent of GMV in Q3 2020.
However, GMV was €187.3 million, down 28 per cent year-over-year, as the effects of the business mix rebalancing initiated late last year continued playing out during the third quarter. But this was not enough to blind the significant path to profitability that the foregoing indices have highlighted.
Commenting Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia, said, “We are making significant progress on our path to profitability with Adjusted EBITDA loss in the third quarter of 2020 decreasing by 50 per cent year-over-year.”
This positive stride is also future-proven by several innovative growth fundamentals that management of Jumia initiated and implemented over a period of time. The “business mix rebalancing” includes increased attraction of Jumia platform for everyday product categories, enhanced promotional discipline and support.
By positioning Jumia as the destination of choice for brands in Africa, over 60 brands from across geographies were on Jumia platform. Multiple enhancements across the logistics and marketing operations were also implemented; this led to a decrease in fulfilment and marketing expenses for Q3 2020 by 20 per cent and 55 per cent respectively, on a year-over-year basis.
The completion of portfolio optimisation in 2019, along with overhead rationalisation, also resulted in a decrease in General and Administrative (G&A) costs excluding share-based compensation of 24 per cent year-over-year in Q3 2020.
The continuous drive for the robust growth of JumiaPay by more than doubling the penetration of JumiaPay TPV to over 25 per cent of GMV in the third quarter of 2020 also bolstered Jumia’s positive outlook.
Attack and lawsuit over the sale of Jumia shares, the slump in share price, loss taking and recent offload of MTN Group’s equities were some of the headwinds that have challenged the e-tailer, shading its potential as a profitable enterprise.
The Q3 2020 positive trajectory no doubt, rewrites the narrative for Jumia, whose performance over the months had been swirled on many fronts.
“We believe the fundamentals of our business have never been stronger, setting a robust foundation for the long term, profitable growth of Jumia,” Hodara and Poignonnec stated.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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