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Jumia Financials Improve; Recession Over

Nigeria is out of recession. That is a reality and not a political statement. The latest Jumia financials confirm that people are opening their purses and hitting Buy buttons.

Jumia grew GMV (gross merchandise volume) by 32.4% year over year to EUR 236 million in 9M 2017. Q3 2017 saw a strong pick-up in GMV growth of 69.7% compared to Q3 2016, resulting in EUR 92 million GMV in the current quarter.

They are adding users, now 2 million in total (across Africa and wherever Jumia operates). But the Adjusted EBITDA shows that more work lies ahead.

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Notes:  On August 30, 2016 Africa eCommerce Holding GmbH, the holding company of Jumia, was merged into Africa Internet Holding GmbH (formerly trading under Africa Internet Group). In June 2016, all business models of Africa Internet Group were renamed around the Jumia brand. The figures shown for all periods refer to Africa Internet Holding GmbH.

(1) Adjusted EBITDA is calculated as operating profit or loss before depreciation of property, plant and equipment, amortization of intangible assets and share-based compensation expenses.

(2) Capital expenditure is calculated as purchase of property, plant and equipment plus acquisition of intangible assets.

(3) Net working capital is calculated as inventories plus trade and other receivables plus prepaid expenses minus trade and other payables.

(4) Deviation to prior publications of GMV is primarily attributable to alignment of foreign currency conversion method to Jumia’s key financials.

(5) The total value of “total transactions” sold within the period, including taxes, including shipping costs.

(6) Total number of valid (i.e. not failed or declined) orders starting the fulfilment process less cancelled orders (before rejected and returned orders), i.e. total number of orders shipped within the period (eCommerce and marketplace).

(7) Number of customers having made at least one transaction as defined in “total transactions” within the last 12 months before end of period.

(8) Pro-forma cash position of EUR 286.2m includes cash on balance sheet plus capital commitments.

Source: Jumia

But the table didn't indicate whether the improved revenue came from Nigeria or somewhere else. All the same, Jumia's perceived revenue growth might be too insignificant in determining where Nigeria truly is on the march out of recession.

It will be good to see a segmented report showing Nigeria market activity separately. It would also help to see if this is organic growth from demand pull or if it is influenced growth from product financing by massive discounts from Jumia

You are right Francis. Though my piece was not to say that Nigeria has to use Jumia to know if we are in recession. Nothing like that. When NG crated to recession, Jumia bled revenue. Now that we are moving up, we can see it is moving up. The correlation is there. NG is Jumia's largest market. Sure that does not mean that without breaking the revenue that we can be certain.

Jumia, hopefully, will begin to break the revenue by country in future.