An e-commerce company recently disclosed $20.1 million in operating losses for the third quarter of 2024 due to challenging economic conditions in its primary markets. Operating losses increased by 10% compared to the previous year.
The company’s stock ($JMIA) is currently valued at $4.16, with its market capitalization dropping to $501.49 million from a peak of $1.32 billion in July 2024, driven by renewed investor confidence.
In the third quarter of 2024, the company’s revenue decreased to $36.4 million, down from $45 million the year before. The gross merchandise value (GMV), representing total sales, slightly decreased to $162.9 million.
The company implemented several operational improvements such as enhancing its logistics network and launching a new warehouse in Lagos, Nigeria in June 2024.
CEO Francis Dufay acknowledged the negative impact of these changes on operations and expenses in the third quarter but expressed confidence in the company’s ability to scale and achieve profitable growth.
Despite the challenges, the company’s liquidity position improved to $164.6 million following the sale of 20 million ordinary shares in August. The company’s embedded finance app, JumiaPay, processed 3 million in transaction volume, highlighting a continued focus on cashless payments.
Looking ahead, the company plans to manage operations meticulously, leveraging the recent capital raise to drive growth while maintaining a disciplined approach to avoid unnecessary expenditures and foster long-term profitability.
Under new leadership, the company has undergone significant restructuring since 2022, including workforce reductions, scaling back in underperforming markets, and discontinuing its food delivery operations. These efforts resulted in a notable reduction of operating losses by 71% in Q1 2024 and 8% in Q2 2024 compared to the previous year.
In a strategic move, the company announced its decision to exit the South Africa and Tunisia markets by the end of 2024 due to poor performance. These markets accounted for a small fraction of customer orders and GMV, prompting a refocus on the remaining nine markets.