Irish software provider Datalex has revised downwards its outlook for the full financial year, after an anticipated recovery in China failed to materialise.
The company, which provides digital retail technology to the airline market, said it expected to report revenue of $22.5 million to $23.5 million and adjusted earnings before interest, tax, depreciation and amortisation of minus $5 million to minus $6 million for the full financial year. That is down from the $25 million to $27 million in revenue and adjusted ebitda of minus $3 million to minus $4.5 million the company forecast in September.
The company blamed the ongoing impact of Covid restrictions on its Chinese customers and the timing of specific services projects which will move from 2022 to 2023. The group had previously anticipated that the Chinese market would recover in the second half of the year, but continued lockdowns in key cities in which its Chinese customers operate has hampered that. The company said the situation would negatively impact its earnings in the second half of 2022.
Datalex said it had continued to see strong engagement with customers elsewhere, with a push to accelerate digital retail roadmaps providing a number of opportunities. “However, partly as a consequence of planning for the delivery of such opportunities, 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 in a statement.