African e-commerce firm Jumia says it is past peak losses, shares jump

African e-commerce firm Jumia Technologies said on Wednesday it was past peak losses and would focus on promotions, marketing and cost cutting in its quest towards profitability, driving its shares up 16% despite a wider quarterly loss.

Jumia is an online marketplace for vendors and food sellers, with associated services including logistics and payments. It was the first Africa-focused tech startup to list on the New York Stock Exchange in 2019.

It reported an adjusted loss before interest, tax, depreciation and amortisation of $57.2 million for the second quarter ended June 30 from $41.6 million in the same period last year.

The company did not say when it expected to make a profit, but said achieving that would take a combination of measures including promotional discounts, ramping up marketing and cutting costs at warehouses by reducing consumption of packaging.

“There is not … a silver bullet that will suddenly make it profitable,” Chief Executive Officer Sacha Poignonnec said.

The company, which operates in 11 African countries, saw total orders increase 35% year-on-year as customers bought more beauty and cleaning products.

Jumia still expects a full-year adjusted EBITDA loss of $200 million-$220 million, but it reduced its full-year capital expenditure guidance to $10 million-$15 million from $15 million-$25 million.

Its quarterly active consumers rose 25% to 3.4 million, while total revenue for the quarter reached $57.3 million, up 42.5%.

Poignonnec brushed off possible competition from Amazon.com (AMZN.O) after a news report said that it could make a foray into countries including Nigeria and South Africa, markets where Jumia has a presence.

“If they were to enter those markets, … it would be a great validation of the attractiveness of e-commerce in Africa,” he said.