Jumia (NYSE:$JMIA) Plummets 52% on Disappointing Q2 2024 Results

6 авг.

Shares of Jumia Technologies (NYSE: JMIA) experienced a sharp 52% drop following the release of its second-quarter 2024 financial results, underscoring significant challenges the e-commerce platform faces in maintaining its market position and financial health.

Key Financial Highlights
- Revenue: Jumia reported a revenue of $36.5 million, marking a 17% decrease year-over-year. However, when adjusted for constant currency, revenue actually grew by 15%.
- Gross Merchandise Volume (GMV): GMV stood at $170.1 million, a 5% decline year-over-year, but showed a 35% increase in constant currency terms.
- Operating Loss: The company posted an operating loss of $20.2 million, an improvement from the $22.1 million loss in Q2 2023, indicating an 8% reduction year-over-year.
- Adjusted EBITDA: Losses narrowed to $16.3 million from $18.2 million in the previous year, reflecting a 10% year-over-year improvement.
- Net Cash Flows: Cash used in operating activities decreased significantly to $8.4 million compared to $19.5 million in Q2 2023.

Strategic Commentary
Jumia’s CEO, Francis Dufay, expressed optimism despite the stark revenue decline. He highlighted that the company is witnessing improved cash efficiency and accelerated usage trends. Key metrics such as orders per customer, excluding JumiaPay app orders, increased to 2.1 orders per customer, and GMV growth in reported currency improved across multiple countries.

"Our quarterly cash burn declined 55% quarter-over-quarter to $8.7 million, thanks to disciplined cost management and reductions in finance costs," Dufay noted. "We continue to see a 6% sequential increase in our active customer count, showing that our strategic priorities are yielding positive results."

Revenue Breakdown
- Marketplace Revenue: Comprised of commissions, fulfillment, value-added services, and marketing, the segment saw a 10% decline year-over-year in USD but a 27% increase in constant currency.
- First-Party Sales Revenue: This segment experienced a 24% year-over-year decline in USD, but a 4% increase in constant currency, primarily affected by lower sales in Egypt and foreign exchange impacts.

Cash Position and Liquidity
Jumia's liquidity stood at $92.8 million as of June 30, 2024, a decrease from $101.5 million in the previous quarter. Despite this decline, the company managed to significantly reduce its cash outflows compared to previous quarters, demonstrating improved financial management.

Operational Highlights
- Customer Metrics: Orders per customer and GMV in constant currency improved, signaling better customer engagement and retention.
- JumiaPay: Transactions increased by 31% year-over-year, driven by higher penetration of JumiaPay on delivery and cashback campaigns.
- Termination of Mastercard Agreement: Jumia ended its commercial agreement with Mastercard Asia/Pacific, aiming to diversify its relationships with other payment service providers.

Outlook
Jumia remains focused on reducing losses and enhancing cash efficiency. The company aims to continue increasing orders and GMV throughout 2024, excluding the potential impact of foreign exchange fluctuations.

“Our strategy is working, and we are confident in our ability to achieve profitable growth,” concluded Dufay.

Technical Outlook
At present, Jumia (NYSE:JMIA) stock has experienced a decline of 50.90%. The stock exhibits a weak Relative Strength Index (RSI) of 26.55, placing it in an oversold region. The daily price chart reveals a downward gap, a pattern indicative of a price decrease due to absence of trading activity. Common factors contributing to this pattern include fundamental indicators, earnings reports, and news releases.

Conclusion
Jumia’s Q2 2024 results highlight the company’s ongoing struggles but also point to areas of improvement and strategic realignment. While the sharp drop in stock price reflects investor concerns, the company’s efforts to streamline operations and enhance cash management could pave the way for a more stable financial footing in the future. Investors and stakeholders will be closely watching Jumia's performance in the upcoming quarters to see if the company can turn its strategic initiatives into sustainable growth.