LAGOS - Jumia Technologies AG (NYSE:JMIA), the leading e-commerce platform in Africa, has reported a significant reduction in its quarterly losses alongside strategic partnerships aimed at enhancing its service offerings. The company's third-quarter financial results for 2023 revealed an adjusted EBITDA loss of $15 million, marking the smallest loss since its initial public offering in 2019.
The company's liquidity improved by $19 million year-over-year due to strategic actions, including a substantial cutback in sales and advertising expenses which were reduced by 74% to $4.3 million. This reduction reflects Jumia's ongoing efforts to streamline operations and focus on profitability. Despite a decrease in revenue by 11% year-over-year to $45 million and a 25% drop in Gross Merchandise Volume (GMV) to $181 million, the company noted positive developments in key performance areas.
Jumia's operating loss saw a significant decline, down by 57% year-over-year to $19 million. Active customers and orders experienced a downturn with a respective decrease of 24.3% and 23%, which the company attributes to strategic initiatives that included withdrawing from economically unsustainable markets. However, Jumia observed an increase in orders from the second quarter to the third quarter of 2023 driven by promotional activities, particularly in digital categories like airtime.
CEO Francis Dufay highlighted that despite challenges such as high inflation and import restrictions that have affected consumer spending and retailer stock levels, there has been a 10% GMV growth across five countries. This was complemented by an 11% sequential increase in orders from Q2 to Q3 of 2023 due to the company's promotional efforts.
In terms of product diversification, Jumia announced a strategic partnership with Starlink, with plans to distribute Starlink's residential kits in Nigeria by the end of the year. This move is expected to enhance Jumia's product offerings significantly. Additionally, JumiaPay transactions grew by 8% year-over-year, with nearly half of the orders placed on the platform utilizing JumiaPay.
The Total Payment Volume (TPV) for Q3 2023 was reported at $48.1 million, marking a 28% decrease year-over-year but showing a 3% increase on a constant currency basis. The TPV as a percentage of GMV remained steady at approximately 27%.
In light of these developments, Jumia has updated its guidance for adjusted EBITDA losses to between $80 million and $90 million for the fiscal year. The announcement led to an uptick in investor confidence, reflected by a 7.5% surge in Jumia's stock price following the release of these financial results.
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