Jumia anticipates that its losses for this year will remain under $100 million.
In the initial quarter of 2023, we reported a significant improvement in Jumia's financial performance, marking its lowest losses in the past four years.
The figures for adjusted EBITDA and operating losses declined to $27 million and $30.9 million, respectively. These metrics showcased a remarkable 55% and 57% year-over-year decrease, aligning with the company's year-end target of achieving adjusted losses within the range of $100 million to $120 million.
Remarkably, Jumia's financials for Q2 2023 revealed even more impressive results, surpassing its accomplishments from the previous quarter. The e-commerce giant achieved a notable 66% reduction in adjusted EBITDA and operating losses, which now stand at $19.3 million and $23.3 million, respectively.
Consequently, Jumia has revised its projected adjusted loss for the entire year, projecting a narrower range of $90 million to $100 million.
Jumia CEO Francis Dufay emphasized the company's disciplined approach in navigating challenging macroeconomic conditions and enhancing efficiency. Dufay stated, "Our efforts have yielded tangible results, evident in a 50% decrease in fulfillment expenses and a 74% decrease in sales and advertising expenses compared to the second quarter of 2022." He further noted that overhead costs, as reflected by G&A excluding share-based compensation, have reduced by a third year-over-year, reaching a four-year low at $17.7 million.
During Q4 2022, Jumia initiated a streamlining initiative that led to a 20% reduction in its workforce, impacting 900 positions across 11 markets. Dufay indicated the possibility of further workforce adjustments throughout the year. The company aims to achieve substantial G&A cost reductions, targeting up to $28 million in savings by Q4.
Additional streamlining actions have included Jumia's strategic recalibration of its product and service portfolio in Q4 2022. The company made the decision to suspend its first-party grocery offering, logistics-as-a-service, and food delivery operations in specific key markets where the economic viability was not sustainable. Jumia also scaled back promotional efforts for various services on its JumiaPay app.