Foreign Exchange Devaluations Hinder Jumia’s Progress Despite Q2 Gains

Jumia, Africa's leading e-commerce platform, reported mixed results for its second quarter 2024. While the company showed progress in key areas like order growth and cost reduction, foreign exchange devaluations continue to weigh on its earnings.

Jumia's overall revenue dipped 17% year-over-year to USD 36.5 M in Q2 2024. However, in constant currency, revenue actually increased by 15%. This highlights the significant impact of currency fluctuations on the company's reported financial performance.

"The decline in USD was primarily driven by the impact of foreign exchange devaluations," said Francis Dufay, Jumia's CEO, in the company's earnings release. "These declines were partially offset by increases in commissions from third-party corporate sales."

Similar to revenue, Jumia's Gross Merchandise Value (GMV) declined by 5% year-over-year to UD 170.1 M in Q2 2024. However, in constant currency, GMV grew by an impressive 35%.

This indicates that Jumia's underlying business is making progress, despite the challenges posed by massive currency devaluations in key markets like Nigeria and Egypt, impacting both purchasing power and supply availability and making for a difficult operating environment.