Datalex interim losses narrow from restated first-half 2018 figures

Travel retail software provider Datalex, which disclosed accounting irregularities earlier this year, said on Wednesday that its net loss for the first half of 2019 narrowed to $6.9 million (€6.2 million).

The company restated its figures for the first half of 2018 to show that it made a $33.1 million loss for the period, compared to a profit of $2 million that was originally reported last year. The company had previously highlighted that it would have to restate its interim 2018 results in light of the accounting scandal.

Much of Datalex's accounting issues relate to its premature booking of service revenue on the Lufthansa project, agreed in 2016, which had gone over budget and missed key deadlines.

Looking ahead, Datalex reiterated guidance issued in September that its full-year adjusted earnings before interest, tax, depreciation and amortisation (ebitda) will come to between a loss of $1 million and surplus of $1 million on flat sales of $45 million.

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The final reporting of restated 2018 figures as well as the interim results for this year "represent an important milestone for the group," said Datalex's new chief executive Sean Corkery.

“The group can now focus more fully on the medium to longer term growth of the business. We are already seeing the benefits of an improved delivery model, with greater focus on execution and providing early value to our customers. We also have a heightened concentration on new business, with a pipeline of new opportunities and ongoing positive dialogue with potential new customers, some of which are at an advanced stage.”

While Lufthansa moved in September to terminate the contract, Datalex commenced a legal case with Frankfurt’s regional court to contest this.

“The outcome of this process is currently uncertain but a financial loss to the group cannot be ruled out. At June 30th 2019, a net asset of $2.1 million, representing deferred contract fulfilment costs, trade receivables and after deduction of contract liabilities, was recorded on the group’s statement of financial position in respect of this customer contract,” it said.