Shares of Jumia Technologies (JMIA -2.75%) have popped today, up by 10% as of noon EST, after the company reported fourth-quarter earnings. Revenue beat expectations and the African e-commerce specialist is marching toward profitability.
Revenue in the fourth quarter came in at 49.3 million euros ($53.7 million), which was ahead of the $49.3 million in sales that analysts were expecting. Annual active consumers jumped 54% to a record 6.1 million, while orders increased 49% to 8.3 million. Adjusted gross merchandise volume (GMV) grew 6% to 275 million euros ($300 million). Jumia's net loss was 63.6 million euros ($69.3 million).
"In the fourth quarter of 2019, we took a number of important actions to support our path to profitability while positioning the business for long term growth," co-CEOs Sacha Poignonnec and Jeremy Hodara said in a statement. "We initiated a rebalancing of our business mix toward higher consumer lifetime value business, reducing promotional intensity on certain product categories, while driving growth of the more affordable, higher purchase frequency ones."
Jumia conducted a portfolio optimization review during the quarter and decided to exit Cameroon, Rwanda, and Tanzania in order to focus better on the other 11 geographical markets where it operates. The tech company had also initiated a sales practice review earlier in 2019 that uncovered a "small number of improper orders," which represented less than 2% of GMV in 2019. Jumia says it has taken steps to prevent those incidents in the future.
"We expect the impact of these [portfolio optimization] initiatives to continue playing out in the coming quarters, with a more meaningful contribution to our path to profitability in 2020 and beyond," the chief executives said.