Jumia cited EndSARS protest as a factor for market volatility as it recorded €28 million operating loss in three months of Q3 this year. The company suffered the loss between July to September, which is Q3 2020 period.
Although, despite the €28 million operating loss in Q3 2020, Jumia said the amount is a three-year low, after decreasing by 49% year-over-year. During the corresponding period of third-quarter 2019, Jumia had recorded operating loss of €54.6 million.
Jumia's revenue for Q3 2020 failed to surpass the €40.9 million it generated during the same period last year, settling at €33.7 million; this is a difference of 17.7% when both periods are compared. This happened at a period Jumia reduced its Marketing & Advertising expenses - from €1.6 million of Q3 2019 to €1.5 million this year's Q3.
Reduction in its expenses and operational loss paid off during the same period under review, as Jumia's gross profit rose by 22.5% when compared to the corresponding period. AllNews gathered that the gross profit hit €23.2 million in Q3 2020, rising above the €19 million of Q3 2019.
It was also gathered from Jumia's financials released last month, that JumiaPay transactions grew by 5.9% during the three months of Q3 this year when compared to 2019 Q3. The company reported its JumiaPay Transactions rose to €2.3 million in 2020 Q3, surpassing the €2.1 million of Q3 last year. JumiaPay is used by the company to transact trades on its e-commerce platform.
These revenues are sourced from eight markets: Nigeria, Egypt, Morocco, Ivory Coast, Ghana, Kenya, Tunisia and Uganda. Nigeria is one of its major revenue sources, and the country is experiencing increasing insecurity, which has led to protests, such as the EndSARS protest - which is against police brutality and police reform.
While commenting on the situation of its operating environment, Jumia mentioned EndSARS as a challenge or factor to its market volatility, "The ongoing COVID-19 pandemic, as well as the ensuing economic challenges, result in substantial uncertainty concerning our operating environment and financial outlook.
"This may be further exacerbated by instances of social protests, as experienced in Nigeria over the course of October as part of the End SARS campaign. These external factors, combined with a continued focus on cost efficiency and, to a lesser extent, the continued effects of the business mix rebalancing, are likely to drive continued volatility across some of our key performance indicators."
Meanwhile, the EndSARS protest has resumed today, December 7, 2020, with protesters making new demands from the government.
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