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 Dipo Olowookere
Renewed buying interest raised the Nigerian Exchange (NGX) Limited by 0.33 per cent on Monday, with gains recorded in almost all the major sectors of the bourse at the close of transactions.
According to data harvested by Business Post, the insurance counter expanded by 0.62 per cent, the banking index grew by 0.59 per cent, the energy sector appreciated by 0.40 per cent, and the consumer goods space improved by 0.10 per cent, while the industrial goods segment closed flat.
When the closing gong was struck by 4 pm to signify the close of business on Customs Street, the All-Share Index (ASI) was up by 1,113.76 points to 243,707.07 points from 242,593.31 points, and the market capitalisation chalked up N714 billion to close at N156.308 trillion compared with the previous session’s N155.594 trillion.
Interest in Nigerian stocks yesterday resulted in a rise in the activity level, with the trading volume soaring by 17.86 per cent to 717.2 million units from 608.5 million units. The trading value advanced by 77.19 per cent to N56.7 billion from N32.0 billion, and the number of deals surged by 36.22 per cent to 73,321 deals from 53,826 deals.
FCMB was the busiest stock during the trading day, with a turnover of 152.3 million units worth N1.8 billion, Premier Paints exchanged 61.0 million units valued at N135.3 million, Dangote Cement traded 34.7 million units for N29.7 billion, The Initiates sold 32.8 million units worth N1.0 billion, and Jaiz Bank transacted 32.6 million units valued at N293.3 million.
Yesterday, the market breadth index was positive after the exchange closed with 37 price gainers and 28 price losers, representing strong investor sentiment.
International Energy Insurance gained 9.92 per cent to settle at N7.98, the Initiates added 9.91 per cent to its share price to quote at N32.15, ABC Transport garnered 9.68 per cent to trade at N6.80, Abbey Mortgage Bank grew by 9.63 per cent to close at N10.25, and Linkage Assurance soared by 9.36 per cent to N1.87.
On the flip side, Fidson Healthcare gave up 10.00 per cent to finish at N122.85, Academy Press crashed by 9.70 per cent to N7.45, RT Briscoe depreciated by 9.43 per cent to N13.45, SUNU Assurances tumbled by 9.37 per cent to N4.06, and Learn Africa decreased by 8.70 per cent to N10.50.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a marginal 0.05 per cent drop on Monday, June 8, depleting the market capitalisation by N1.27 billion to N2.606 trillion from N2.607 trillion, and cutting the Unlisted Security Index (NSI) by 2.12 points to 4,356.20 points from the previous 4,358.32 points.
The contraction witnessed during the session was triggered by a price loser, which overpowered that gains recorded by two securities on the trading platform.
Data indicated that MRS Oil Plc lost N6 at the close of business to settle at N165.00 per share compared with last Friday’s price of N171.00 per share.
Conversely, Lighthouse Financial Services Plc added 9 Kobo to sell at N1.03 per unit versus 94 Kobo per unit, and Central Securities Clearing System (CSCS) Plc appreciated by 8 Kobo to N78.48 per share from N78.40 per share.
The volume of securities traded by investors yesterday soared by 51.9 per cent to 213,188 units from 140,345 units, and the value of securities increased by 12.6 per cent to N20.2 million from N17.9 million, while the number of deals executed fell by 7.4 per cent to 25 deals from 27 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 64.8 million units exchanged for N4.4 billion.
GNI Plc also remained as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
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