Irish airline retail technology company Datalex has warned that continued lockdowns in China will prevent annual revenues and profits from recovering to pre-Covid levels this year.
The Dublin-listed firm previously anticipated that the Chinese market would experience a material recovery in the second half of the year, but has now said that revenues and earnings in China for the second half will be "negatively impacted".
For the full year, the group expects to report revenues of $22.5m to $23.5m and adjusted earnings of $5m to $6m.
Elsewhere, Datalex said it has seen strong engagement with customers transitioning into digital retail, resulting in "enhanced opportunities" for the company, although planning for the delivery of said opportunities has hit services activity levels.
It is now expected that services activity levels will be lower than expected in H2 2022 as certain projects move out to 2023, Datalex said. This will negatively impact 2022 revenues but will positively contribute to growth in 2023.
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Sean Corkery, CEO of Datalex, said: “While short term forecasting has continued to be difficult, we remain confident in the ability of our business to grow in the medium to long term.
"Airlines are focused on accelerating their digital offering and Datalex is very well placed to assist them. I am really encouraged by the strong engagement the team is having with current and prospective customers across the globe as we continue to execute on customer renewals and build on our robust pipeline of potential new customers.
"In addition, I am happy to report that the activation of our new customers, EasyJet and Virgin Australia is progressing well. All of which we expect to result in meaningful revenue growth in 2023 and beyond.”
Datalex announced it had secured EasyJet in September, describing the deal as an "important strategic milestone," after tying down Virgin Australia earlier in the year.
Revenues for the first half of the year fell 17% to $10.4m due to reduced transaction volumes in China, and the travel software company made an EBITDA loss of $2.1m after operating costs rose 13% to $13.8m.
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