Legend Internet reassures investors after N199.34 million pre-tax loss in H1-2026
Legend Internet Plc has reassured investors of stronger future earnings prospects despite posting a pre-tax loss of N199.34 million for the six months ended January 31, 2026, as aggressive investment in network expansion, rising operating costs and higher financing expenses weighed on profitability.
Legend Internet Plc has reassured investors of stronger future earnings prospects despite posting a pre-tax loss of N199.34 million for the six months ended January 31, 2026, as aggressive investment in network expansion, rising operating costs and higher financing expenses weighed on profitability.
The broadband and digital services provider swung from a pre-tax profit of N239.85 million in the corresponding period of 2025 to a loss position, marking its first interim loss since listing on the Nigerian Exchange (NGX).
According to the company’s unaudited financial results for the half-year period ended January 31, 2026, filed on the Nigerian Exchange (NGX), administrative expenses alone — at N457.62 million — exceeded the company’s gross profit of N322.99 million for the period, making an operating loss mathematically unavoidable even before finance charges were applied.
An analysis of Legend Internet’s H1 2026 financial performance reveals that the swing to a loss position was driven by the convergence of four pressure points. These include:
However, management maintained that the earnings pressure reflects the short-term impact of an expansion strategy aimed at strengthening infrastructure, enhancing service delivery, and supporting long-term growth.
The Chief Executive Officer, Aisha Abdulaziz, said the company remains focused on building a stronger platform for sustainable earnings and shareholder value.
Despite the earnings setback, management argues that the results should be viewed in the context of ongoing investments designed to strengthen the company’s competitive position in Nigeria’s expanding broadband market.
The unaudited financial results showed that revenue declined by 18.84% to N505.36 million from N622.64 million in the corresponding period of 2025.
Cost of sales fell by a slower 13.69% to N182.37 million, resulting in gross profit declining 21.48% to N322.99 million.
The major pressure point came from operating expenses. Administrative expenses surged 174.38% to N457.62 million, exceeding gross profit by N134.63 million and pushing the company into an operating loss position.
Personnel expenses accounted for N153.50 million of administrative costs, while depreciation charges stood at N98.36 million.
Professional fees, transport and travel expenses, and marketing costs also increased during the period.
As a result, the company recorded an operating loss of N134.63 million compared with an operating profit of N244.55 million a year earlier, representing a deterioration of N379.18 million.
Finance costs compounded the pressure on earnings, rising by 1,278.78% to N64.71 million from N4.69 million in the prior-year period.
The increase was linked to new commercial paper borrowings of N537.95 million, which pushed total borrowings to N564.88 million from N75.23 million at the end of July 2025.
After accounting for finance charges, the company posted a pre-tax loss of N199.34 million and a negative earnings position of N99.34 million for the six-month period.
Although total liabilities rose by 143.33% to N903.91 million, largely due to increased short-term borrowings, shareholders’ funds remained robust at N2.55 billion.
Management said the strength of the equity base demonstrates the resilience of the balance sheet despite current earnings pressures.
Total assets increased by 7.55% to N3.45 billion from N3.21 billion at the end of July 2025, reflecting continued investment in infrastructure and operational capacity.
The company also reported a significant improvement in liquidity. Cash and cash equivalents increased sharply to N165.5 million from a negative position of N28.3 million previously, providing a stronger buffer for operations and future growth initiatives.
Legend Internet continued to deepen its infrastructure footprint during the review period, with property, plant and equipment rising to N3.25 billion from N3.20 billion in July 2025. The company invested an additional N50.49 million in fibre network expansion and related infrastructure projects.
Its fibre network assets alone carried a book value of more than N2.44 billion at the end of January 2026, underscoring the scale of its long-term investment programme.
Market reaction to the results has been relatively muted. The company’s share price slipped marginally from N6.06 on May 29 to N5.90 as of June 2, although the stock remains about 11.5% above its opening price for the year.
Investors will be watching closely to see whether management can moderate operating costs, improve profitability, and translate its infrastructure investments into stronger earnings performance in the second half of the 2026 financial year.