Legend Internet Reports Loss Amid Fibre Expansion Costs

By Ayo Susan

Legend Internet Plc reported a comprehensive loss of N99.34 million for the six months ended 31 January 2026, reversing a profit of N239.85 million recorded in the corresponding period of 2025. The broadband and digital services provider attributed weaker earnings to declining revenue, aggressive infrastructure expansion, rising administrative expenses and higher financing costs. Revenue fell by 18.8 percent to N505.36 million, while finance costs surged to N64.71 million from N4.69 million. Despite the earnings pressure, the company continued investing in fibre infrastructure, improved liquidity, and expanded its digital ecosystem. Chief Executive Officer of Legend Internet Plc, Aisha Abdulaziz, maintained that the company’s expansion strategy is designed to strengthen future profitability and long-term shareholder value.

Abdulaziz stated: “We are building for the future, and while short-term earnings may reflect the weight of our expansion strategy, the underlying fundamentals of the business remain strong. Our investments in fibre infrastructure, technology, and operational capacity are positioning Legend Internet for improved performance, stronger cash generation, and sustainable shareholder value in the periods ahead.”

DECISION HIGHLIGHT

Legend Internet is prioritising infrastructure-led growth over near-term profitability, accepting earnings pressure and higher leverage in exchange for expanded fibre assets, stronger network capacity and future market positioning.

DECISION MEMO

The company’s results reflect a familiar trade-off facing broadband infrastructure providers: growth versus profitability.

While headline earnings deteriorated significantly, the financial statements suggest that the decline was driven more by expansion costs and financing activities than by a collapse in underlying operations. The substantial increase in administrative expenses, combined with higher borrowing costs, absorbed much of the value generated by the company’s revenue base.

The strategic rationale is evident in management’s continued investment in fibre infrastructure. Broadband markets typically require significant upfront capital expenditure before scale benefits emerge. By expanding network assets during a period of growing digital connectivity demand, Legend Internet appears to be positioning itself for future subscriber growth rather than immediate earnings optimisation.

However, the strategy carries execution risk. Rising debt levels and declining revenues mean future profitability will depend on management’s ability to convert infrastructure investments into stronger customer acquisition, improved utilisation rates and higher recurring revenue.

The broader significance lies in the continued maturation of Nigeria’s broadband sector, where infrastructure ownership increasingly determines long-term competitive advantage.

DATA BOX

Profitability

• Comprehensive loss: N99.34 million
• Previous period profit: N239.85 million
• Loss before and after tax: N199.34 million
• Earnings per share:
  • 2026: Negative 11 kobo
  • 2025: Positive 12 kobo

Revenue Performance

• Revenue: N505.36 million
• Previous period revenue: N622.64 million
• Revenue decline: 18.8 percent

Operating Metrics

• Gross profit:
  • 2026: N322.99 million
  • 2025: N411.33 million
• Administrative expenses:
  • 2026: N457.62 million
  • 2025: N166.78 million
• Operating result:
  • Loss of N134.63 million
  • Previous operating profit: N244.55 million

Revenue Composition

• Fibre internet services: N198.30 million
• Wholesale bandwidth: N12.58 million
• WiFi services: N2.20 million
• Legend Pay: N279,000

Balance Sheet

• Total borrowings:
  • January 2026: N564.88 million
  • July 2025: N75.23 million
• Commercial paper obligation: N537.95 million
• Shareholders’ funds: N2.55 billion
• Retained earnings: N410.75 million

Liquidity and Assets

• Cash and cash equivalents:
  • January 2026: N269.13 million
  • July 2025: N21.02 million
• Financing cash inflow: N382.04 million
• Fibre infrastructure asset value: Over N2.44 billion

WHO WINS / WHO LOSES

Winners

• Long-term shareholders if infrastructure investments generate future growth.
• Broadband consumers benefiting from network expansion.
• Enterprise customers requiring improved fibre connectivity.
• Digital services businesses dependent on broadband infrastructure.

Potential Losers

• Investors focused on short-term earnings performance.
• Shareholders exposed to dilution or leverage risks if growth targets are not achieved.
• Competitors facing a growing fibre infrastructure footprint.

POLICY SIGNALS

• Broadband infrastructure remains a capital-intensive growth sector.
• Digital connectivity continues to attract long-term investment despite earnings volatility.
• Financial inclusion and digital service expansion remain important industry themes.
• Infrastructure ownership is becoming a key competitive differentiator within the telecommunications ecosystem.

INVESTOR SIGNAL

The results present a mixed picture. Profitability weakened sharply, but liquidity improved, equity remained above N2.5 billion and infrastructure investment continued. Management’s strategy suggests confidence that future demand for broadband services will justify current expansion spending. For investors, the key consideration is whether the growing fibre asset base can generate sufficient revenue growth to offset rising leverage and operating costs.

RISK RADAR

• Continued revenue contraction.
• Rising leverage and financing obligations.
• Higher interest costs reducing profitability.
• Delayed monetisation of fibre infrastructure investments.
• Competitive pressure within the broadband market.
• Execution risks associated with network expansion.
• Potential deterioration in shareholder returns if earnings recovery is delayed.

The central question for investors is no longer whether Legend Internet is expanding, but whether the scale of its infrastructure investment can generate sufficient revenue growth and operating efficiency to justify the near-term erosion of profitability.