JOHANNESBURG (Reuters) – African e-commerce firm Jumia Technologies said on Wednesday that cost savings had helped it reduce third quarter losses by 67% from a year earlier, with a further sharp drop expected this year.
Jumia is aggressively cutting costs in order to turn profitable, including head count reductions, scaling back the range of products offered such as groceries and reducing delivery services not related to its e-commerce business.
The first Africa-focused tech start-up to list on the New York Stock Exchange reported an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $15 million in the three months to Sept.30 from a loss of $46 million in the same period of 2022.
Chief executive Francis Dufay said the significant reduction in losses and cash utilisation had secured the company a liquidity position that will enable it “to work on fundamental, long-term improvements” to grow its core business.
Jumia had a liquidity position of $147 million at the end of September.
It now expects an adjusted 2023 EBITDA loss of $80 million to $90 million compared to the previously communicated range of $90 million to $100 million.
Revenue fell 11% year on year to $45 million, hit by weaker currencies in several markets, but was up 19% in constant currency terms.
Quarterly active consumers fell 24.3% to 2.3 million, largely driven by deliberate decisions to focus on core categories and reduce consumer incentives.
Inflation effects persisted in the period, affecting both consumers’ spending power and sellers’ ability to source goods from abroad, Jumia said.
(Reporting by Nqobile Dludla; Editing by Kirsten Donovan)