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01/11 11:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals significant challenges: currency devaluation, declining corporate sales, increased operational costs, and widened losses. Despite some positives like order growth and improved efficiency, the overall financial performance is weak, with revenue, gross profit, and EBITDA all declining. The Q&A section highlights supply challenges and unclear responses from management, further dampening sentiment. Without a share buyback program or strong guidance, the stock is likely to react negatively over the next two weeks.
Revenue $45.7 million, down 23% year over year in USD and down 2% in constant currency, driven by lower corporate sales in Egypt.
Adjusted EBITDA Negative $13.7 million, compared to negative $0.6 million in Q4 '23.
Loss before income tax from continuing operations $17.6 million, compared to $17.1 million in Q4 '23, a 3% increase year over year.
Cash burn $30.6 million, compared to $26.8 million in Q4 '23, primarily driven by one-time termination costs of $1.3 million and a working capital increase of $13.5 million.
Gross profit $23.9 million, down 36% year over year or 18% on a constant-currency basis.
Gross profit margin 12% for Q4 '24, compared to 16% in Q4 '23.
Fulfillment expense $12.9 million, up 11% year over year.
Sales and advertising expense $4.8 million for the quarter, down 24% year over year.
Technology and content expense $10 million for the fourth quarter, representing an increase of 1% year over year.
G&A expense $12.9 million, up 5% year over year.
Liquidity position $133.9 million, including $55.4 million in cash and cash equivalents.
Net cash flow used in operating activities $26.5 million for Q4 2024.
Capex $1.8 million, higher than Q4 2023.
Full year revenue $167.5 million, down 10% year over year.
Full year gross profit $99.5 million, reflecting a 7% decline year over year.
Full year adjusted EBITDA Negative $51.3 million.
Full year loss before income tax from continuing operations $97.6 million, 1% down year over year.
Product Assortment Expansion: Jumia plans to expand its product assortment at affordable prices by sourcing directly from international sellers, particularly from China and Turkey.
Black Friday Sales Event: The Black Friday sales event was the largest of the year, demonstrating Jumia's ability to provide the right products at competitive prices.
Market Expansion: Jumia extended its reach beyond main urban centers into upcountry markets, with upcountry orders accounting for 56% of Q4 '24 orders.
Exit from Non-Strategic Markets: Jumia exited non-strategic markets, specifically South Africa and Tunisia, continuing operations in nine countries.
Operational Efficiency: Jumia reduced marketing spend from $6.2 million in Q4 '23 to $4.8 million in Q4 '24, demonstrating commitment to cost-efficient marketing.
Logistics Improvements: Jumia streamlined operations by consolidating its warehouse footprint and enhancing logistics capabilities.
Strategic Growth Initiatives: Jumia's focus for 2025 includes driving top-line growth and achieving broader operational efficiencies to enhance profitability.
J-Force Expansion: Jumia plans to further expand its J-Force presence, increasing the number of active agents to strengthen customer engagement.
Currency Devaluation: The company experienced a decline in GMV of 12% in USD due to early 2024 currency devaluations, impacting revenue and average order value.
Corporate Sales Decline: There was a significant reduction in corporate sales in Egypt, reversing a previous trend of strong sales, which contributed to lower revenue and gross profit.
Operational Costs: The company faced increased operational costs, including a cash burn of $30.6 million in Q4 2024, driven by one-time termination costs and working capital increases.
Market Exit Costs: The closure of operations in South Africa and Tunisia incurred one-time termination costs of $1.3 million, impacting overall financial performance.
Macroeconomic Headwinds: The overall macroeconomic environment posed challenges, including currency devaluation and shifting procurement cycles, affecting sales and profitability.
Loss Before Income Tax: The loss before income tax from continuing operations was $17.6 million in Q4 2024, reflecting ongoing financial challenges despite operational improvements.
Fulfillment Expenses: Fulfillment expenses increased by 11% year over year, driven by external factors such as rising fuel prices, impacting overall profitability.
Upcountry Expansion: Doubling down on upcountry expansion to unlock new markets and address underserved regions without increasing fixed costs. Upcountry orders accounted for 56% of Q4 '24 and 54% of full year 2024 orders.
Product Assortment Expansion: Expanding product assortment at affordable prices by sourcing directly from international sellers, particularly from China and Turkey.
Customer and Seller Experience: Updated seller platform to streamline seller experience and increased J-Force presence to 29,000 agents, a 39% increase year over year.
Operational Efficiency: Focus on marketing efficiency by prioritizing low-cost channels and increasing productivity through automation in logistics and customer service.
Physical Goods Orders Growth: Anticipate physical goods orders to grow between 15% and 20% year over year.
GMV Projection: Projected GMV between $795 million and $830 million in 2025, a year-over-year increase of 10% to 15%.
Loss Before Income Tax Forecast: Forecast loss before income tax to be in the range of negative $65 million to negative $70 million, a year-over-year decrease of 33% to 28%.
Share Buyback Program: None
The earnings call indicates strong growth prospects with revised upward guidance for 2025 and a strategic focus on market expansion and efficiency improvements. Despite some cautious management commentary, the overall sentiment is positive, driven by reduced costs, promising advertising potential, and a strong position in key markets. The Q&A section reinforced these positives with insights into sustainable customer growth and supply chain improvements. While there are some uncertainties, the overall outlook suggests a positive stock price movement.
The earnings call highlights several positive aspects: improved cost efficiency, expansion into underserved regions, strengthened supplier relationships, and increased growth guidance. The Q&A session reveals optimism about growth potential in secondary cities, improved supply chain stability, and profitability in logistics. Despite some unclear responses, the overall sentiment is positive, driven by the raised growth projections and strategic focus on cost control and expansion. The absence of negative catalysts and the company's focus on growth and efficiency suggest a positive stock price movement in the near term.
The earnings call reveals a decline in revenue, gross profit, and margins, with increased losses and cash burn, which are negative indicators. Despite a focus on operational efficiency and some positive trends in order growth and supply from Asia, the volatility in corporate sales and macroeconomic challenges, particularly in Egypt, weigh heavily. The Q&A section highlights risks of increased competition and lack of clear guidance on some financial metrics. The overall sentiment leans negative due to these financial struggles and uncertainties.
The earnings call reveals significant challenges: currency devaluation, declining corporate sales, increased operational costs, and widened losses. Despite some positives like order growth and improved efficiency, the overall financial performance is weak, with revenue, gross profit, and EBITDA all declining. The Q&A section highlights supply challenges and unclear responses from management, further dampening sentiment. Without a share buyback program or strong guidance, the stock is likely to react negatively over the next two weeks.
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