Legend Internet Posts Profit Surge but Faces Cash Crunch Amid Rising Costs in Nigeria’s ISP Market
Legend Internet Plc, Nigeria’s first publicly listed internet service provider (ISP), has delivered stronger annual profits even as it battles mounting costs and dwindling cash reserves. The company’s 2025 financial results show it is making money on paper but grappling with liquidity pressures that highlight the challenges of scaling broadband connectivity in Africa’s largest economy.
For the year ended July 31, 2025, revenue inched up 4% to ₦1.19 billion ($799,000), while gross profit rose to ₦761.4 million ($511,000) from ₦677.4 million a year earlier. Profit after tax jumped 44% to ₦172.7 million ($116,000), supported by tighter cost controls. Earnings per share increased to 9 kobo from 6 kobo in 2024, reflecting stronger bottom-line performance since its initial public offering (IPO) earlier in the year.
Despite the headline gains, quarterly figures reveal sharp swings. Profit after tax plunged by more than half to ₦32.9 million ($22,085) in the third quarter as operating expenses nearly tripled to ₦122.6 million ($82,329), driven by higher staff, consultancy and marketing costs. Earnings per share fell to just 2 kobo from 7 kobo a year earlier, underscoring the cost pressures facing the ISP in Nigeria’s fiercely competitive telecom landscape.
Legend Internet’s bigger headache is cash generation. Net cash from operations turned negative at ₦72.6 million ($48,000) compared with positive flows last year. By July, cash balances had dropped to ₦21 million ($14,000) while the overdraft climbed to ₦49 million ($33,000). The company leaned on short-term borrowings, adding ₦50 million in loans as total short-term liabilities swelled to ₦464.8 million ($312,574), even though it reported no long-term debt.
With total assets up slightly to ₦3.34 billion ($2.24 million) and fibre infrastructure valued at over ₦2.6 billion ($1.7 million), Legend still commands a significant footprint. Shareholders’ funds stood at ₦2.87 billion ($1.9 million) and retained earnings rose to ₦734.6 million ($493,527). But analysts warn that without stronger cash flows and tighter cost discipline, the ISP’s profit gains may prove fragile. As Nigeria’s internet market grows, Legend’s ability to balance expansion with financial stability will determine whether it can maintain its edge as the country’s trailblazing listed ISP.
source: techcabal