Chinese artificial intelligence specialist iFlyTek reported a loss in the first quarter of the year, blaming the weak performance on operating difficulties due to the Covid-19 pandemic.

The company’s net loss totaled 131 million yuan ($18.3 million) in the January-to-March period, compared with a profit of 102 million yuan a year ago, according to an announcement published Wednesday on the Shenzhen Stock Exchange’s website. Its quarterly revenue also dropped 28 % year-on-year to 1.4 billion yuan.

iFlyTek attributed the downturn to coronavirus-induced delays in the operation, delivery and inspection of its projects during the period.

The first-quarter results are in line with iFlyTek’s previous estimate for a net loss of between 125 million yuan to 135 million yuan in the first quarter.

However, iFlyTek said the pandemic is unlikely to severely hurt its businesses in the long term, as the artificial intelligence industry and the company’s businesses “are gaining an increasingly favorable environment for development.”

The company also said that it won new contracts worth 920 million yuan in March, representing a year-on-year increase of 91%, which will help boost its revenue growth in the second quarter.

iFlyTek was added to the U.S.’s so-called “Entity List” last October, stripping it of access to products and services from American suppliers. In February when the coronavirus began spreading across China, the company obtained approval from the U.S. Department of Commerce to be temporarily exempted from the blacklist and was allowed to buy American-made medical supplies for China’s fight against the pandemic.

Contact reporter Ding Yi (yiding@caixin.com)

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