Legend Internet Plc has reassured investors of stronger future earnings and sustainable value creation after reporting a pre-tax loss of N199.34 million for the six months ended January 31, 2026, as increased spending on network expansion, rising operating costs, and higher financing expenses weighed on profitability.
The broadband and digital services provider recorded its first interim loss since listing on the Nigerian Exchange (NGX), reversing from a pre-tax profit of N239.85 million posted in the corresponding period of 2025.
According to the company’s unaudited half-year results filed with the NGX, profitability was significantly impacted by a sharp increase in operating expenses. Administrative costs rose to N457.62 million, exceeding the company’s gross profit of N322.99 million and resulting in an operating loss even before finance charges were accounted for.
Despite the setback, management emphasized that the weaker earnings reflect the short-term impact of strategic investments aimed at expanding infrastructure, improving service delivery, and strengthening the company’s long-term competitive position in Nigeria’s growing broadband market.
Expansion strategy weighs on earnings
Commenting on the results, Chief Executive Officer, Aisha Abdulaziz, said the company remains focused on building a stronger foundation for future growth.
She noted that ongoing investments in fibre infrastructure, technology, and operational capacity are expected to drive improved performance, stronger cash generation, and enhanced shareholder value over time.
According to her, while the expansion programme is currently exerting pressure on earnings, the underlying fundamentals of the business remain strong.
Revenue declines as costs surge
A review of the financial statements showed that revenue declined by 18.84% to N505.36 million from N622.64 million recorded in the same period of 2025.
Cost of sales also declined, though at a slower pace, falling by 13.69% to N182.37 million. Consequently, gross profit dropped by 21.48% to N322.99 million.
The most significant challenge came from operating expenses, particularly administrative costs, which surged by 174.38% year-on-year to N457.62 million.
Personnel expenses accounted for N153.50 million of the total administrative costs, while depreciation charges reached N98.36 million. Professional fees, transportation and travel expenses, as well as marketing costs, also increased during the review period.
As a result, the company recorded an operating loss of N134.63 million, compared to an operating profit of N244.55 million a year earlier.
Borrowing costs add pressure
Finance costs further weakened earnings, rising sharply by 1,278.78% to N64.71 million from N4.69 million in the corresponding period of 2025.
The increase was linked primarily to new commercial paper borrowings amounting to N537.95 million, which pushed total borrowings to N564.88 million from N75.23 million at the end of July 2025.
After accounting for financing costs, the company reported a pre-tax loss of N199.34 million and a net loss of N99.34 million for the six-month period.
Balance sheet remains resilient
Despite the earnings decline, Legend Internet’s balance sheet remained relatively strong.
Total assets increased by 7.55% to N3.45 billion from N3.21 billion at the end of July 2025, reflecting continued investments in infrastructure and operational capacity.
Property, plant, and equipment rose to N3.25 billion following additional investments of N50.49 million in fibre network expansion and related infrastructure projects. The company’s fibre network assets alone were valued at more than N2.44 billion as of January 2026.
While total liabilities climbed by 143.33% to N903.91 million due largely to increased short-term borrowings, shareholders’ funds remained robust at N2.55 billion.
Management said the strong equity position demonstrates the resilience of the company’s balance sheet and its capacity to support future growth initiatives.
Liquidity position improves
The company also reported a significant improvement in liquidity during the period.
Cash and cash equivalents rose sharply to N165.5 million from a negative balance of N28.3 million recorded previously, providing a stronger financial buffer to support operations and future expansion plans.
Market reaction remains muted
Investor reaction to the results has been relatively subdued.
Legend Internet’s share price declined slightly from N6.06 on May 29 to N5.90 as of June 2, 2026. However, the stock remains approximately 11.5% above its opening price for the year, suggesting that investors may be focusing on the company’s long-term growth prospects rather than short-term earnings weakness.
Going forward, market participants will be closely watching management’s ability to control operating costs, improve profitability, and convert its substantial infrastructure investments into stronger revenue growth and earnings performance in the second half of the 2026 financial year.
