Following claims by Beverly Hills-based Citron that Jumia made false disclosures during its inital public offer (IPO) as well as alleged fradulent dealings among its executives, the company has labelled the report as “untrue”.
This was even as it said it will be looking at more innovative ways of discharging its logistics as well as bringing more people to shop online.
Chief Executive Officer, Jumia Nigeria, Juliet Anammah, who spoke to newsmen in Lagos on Wednesday, noted that the company’s prospectus was issued before IPO and described the report as false while adding that its impressive Q1 2019 results reflects the company’s performance.
Barely one month after it listed on the New York Stock Exchange (NYSE), the company recorded a 58 per cent growth in its Gross Merchandise Volume (GMV) for the first quarter of 2019.
According to the results, its adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) loss as a percentage of GMV improved from -19.8 per cent in the first quarter of 2018 to -16.4 per cent in Q1 2019, while gross profit margin as a percentage of GMV increased from 5.6 per cent in the first quarter of 2018, to 6.5 per cent, as a result of the increased GMV monetisation rate.
“We stand with our prospectus which represents our business and is related to our business. The prospectus was issued before listing as it is customary that you allow investors to take a look at your business, projection and risk identified. Part of the reasons why we brought our earnings forward was to show from our Q1 2019 which we are very positive and happy about reflects the company as opposed to the fraud allegations.
The way our business is structured especially the black friday showed that we delivered strong and impressive result and we are leveraging on our strong GMV growth to drive monetization as there is a lot coming in through marketing, value added services, commissions and fufillment” She explained.
Anammah noted that the company is not in a hurry to be more profitable and added that the improved spending of 5.1 per cent posted in 2019 in terms of expenses as against 7.2 per cent is as a result of high recognition, high consideration and online destination of the brand.
According to her, Jumia was profitable and has remained profitable covering the variable and fixed part of the business which reflects that the company is improving on its path to profitability on the part of the total fufillment cost.
She added that the company is not aware of any fraude relating to the management or employees while stating that there was no discrepancies in the company’s figures as the Citron report had said.
The Jumia Nigeria CEO thereafter said the company will concentrate on existing market and consolidate its base where it operates, adding that as long as fundamentals remain strong, Jumia will continue to create a sustainable ecosystem of digital services and infrastructures through online and mobile market places.
“We have to very careful not to jump on the narrative that seeks to belittle the African continent as we have to take our time to check very carefully before putting out something that might kill the brand because we see Africa as a massive market”. Anammah said.