Q2 2019: Jumia reports €17.3 million profit

Jumia Technologies AG has announced that it recorded €17.3 million, a 94 per cent year-on-year (yoy) increase in gross profit for the quarter ended June 30, 2019.
This is even as the company confirmed to Daily Sun that it has sacked three top management staff after discovering inflated sales figures in its Nigerian business.
According to its results, the technological firm’s gross merchandise volume (GMV) increased this quarter by 69 per cent compared to 58 per cent in the second quarter of 2018, due to a variety of factors, including strong marketplace growth and robust consumer acquisition and re-engagement momentum while its gross profit soared to €17.3 million as against €8.9 million recorded in the corresponding period of 2018.
The number of active consumers as at June 30, 2019 stood at 4.8 million, up from 3.2 million a year ago and 4.3 million at the end of the first quarter of 2019 while its Adjusted EBITDA loss as a percentage of GMV improved from negative 21.4 per cent in the second quarter of 2018 to negative 15.8 per cent in the second quarter of 2019.
Commenting on the results, Co- Chief Executive Officers, Jumia Technologies AG, Sacha Poignonnec, and Jeremy Hodara, noted that Jumia continued to deliver on its financial strategy of generating strong growth of its topline drivers, while accelerating monetization, driving cost efficiencies and developing JumiaPay which remains a key focus area and  is now offered in six countries that include Nigeria, Egypt, Ivory Coast, Ghana, Morocco and Kenya.
“Our GMV increased by 69 per cent year-on-year and our gross profit grew by 94 per cent. Our Adjusted EBITDA loss as a percentage of GMV decreased by 562 basis points (5.62 percentage points) and our Operating loss, amounting to €66.7 million, decreased as a percentage of GMV by 148 basis points (1.48 percentage points).
“These results reflect our continued focus on offering a relevant and engaging online shopping and lifestyle destination for consumers, while providing our sellers with an attractive value proposition and a platform to grow their businesses. Despite the challenges in the economy, we remain focused on all aspects of our growth strategy, particularly JumiaPay , as we continue to drive its usage in our markets”, they said.
The company further revealed that it had received information alleging that some of its independent sales consultants, members of the company’s JForce programme in Nigeria, might have engaged in improper sales practices, while adding that it identified several JForce agents and sellers who collaborated with employees in order to benefit from differences between commissions charged to sellers and higher commissions paid to JForce agents.
JForce is a decentralised sales force with dozens of thousands of agents which allows Jumia to physically interact with consumers.
According to the company, the transactions in question generated approximately 1 per cent of its GMV in each of 2018 and the first quarter of 2019 and had virtually no impact on the firm’s 2018 or 2019 financial statements.
“We have terminated the employees and JForce agents involved, removed the sellers implicated and implemented measures designed to prevent similar instances in the future. The review of this matter is closed. More recently, we have also identified instances where improper orders were placed, including through the JForce programme, and subsequently cancelled.
Based on our findings to date, we believe that the transactions in question generated approximately 2 per cent of our GMV in 2018, concentrated in the fourth quarter of 2018, approximately 4 per cent in the first quarter of 2019 and approximately 0.1 per cent in the second quarter of 2019.”