An­tic­i­pates buy­ing stake in Swazi Mo­bile The com­pany has just paid a div­i­dend of E41 mil­lion share­hold­ers in May Its profit af­ter tax also in­creased from E64.1 mil­lion to E73 mil­lion

Swazi­land Em­pow­er­ment Lim­ited (SEL) an­tic­i­pates a slump in in­come fol­low­ing the en­trance of the new mo­bile com­pany, Swazi Mo­bile in the lo­cal mar­ket.

The com­pany holds stake in Swazi MTN.

Speak­ing dur­ing the com­pany’s an­nual gen­eral meet­ing held on Fri­day at the Swazi­land Water Ser­vices Cor­po­ra­tion (SWSC) au­di­to­rium in Ezul­wini, SEL Chair­man Cleopas Dlamini said although it has not been pos­si­ble to de­ter­mine thus far what the im­pact would be on SEL’s in­come, they have ob­served sub­stan­tial re­duc­tion in the prices of tele­coms ser­vices.

SEL re­ceived a div­i­dend of E66.3 mil­lion and has just paid E41 mil­lion to share­hold­ers in May, sig­nal­ing a 11 per cent in­crease from the div­i­dend re­ceived last year.

Dlamini said the com­pany’s in­vest­ment in Swazi MTN has also just been reval­ued in ac­cor­dance with in­ter­na­tional fi­nan­cial re­port­ing stan­dards to just over E449.5 mil­lion.

SEL’s profit af­ter tax also in­creased from E64.1 mil­lion to E73 mil­lion.

Dlamini said while they might be no re­duc­tion in Swazi MTN’s vol­umes of busi­ness, but the re­duc­tion in tar­iffs might re­sult in a de­crease of the com­pany’s prof­its and con­se­quently, this could af­fect SEL’s in­come.

He said it was also pos­si­ble that Swazi MTN might have lost part of its cus­tomers to Swazi Mo­bile.

As a re­sult, he said the com­pany has to se­ri­ously con­sider in­vest­ment di­ver­si­fi­ca­tion.

“SEL has not been able to come up with a vi­able in­vest­ment di­ver­si­fi­ca­tion strat­egy to broaden the in­come base, this re­mains a chal­lenge to the in­vest­ment com­mit­tee,” he said.

Dlamini said only time will tell though, since Swazi Mo­bile was still new and have not yet to­tally de­liv­ered.

How­ever, he said the re­turn on in­vest­ment in Swazi MTN has also not been sig­nif­i­cant over the years though they have been in a mo­nop­oly for a very long time. Some of the mem­ber­ship was also of the view that Swazi MTN’s ser­vice qual­ity has gone down with the price and said there was a need for share­hold­ers to as­cer­tain how they could in­flaunce the com­pany to pull up its socks to sur­vive the emerg­ing com­pet­i­tive en­vi­ron­ment.

But still, Dlamini said Swazi Mo­bile a 19 per cent

was still ‘very very new’ to be com­pared with Swazi MTN.

“We also think that Swazi MTN will con­tinue to in­vest more in equip­ment,” he said.

How­ever, he said they have also as­sessed an op­por­tu­nity to buy Swazi Mo­bile shares and they fur­ther in­vited them to make a pre­sen­ta­tion.

Nev­er­the­less, when tabling the com­pany’s re­port In­vest­ment Com­mit­tee Chair­per­son Dan Nt­shal­intshali said they de­cided to ditch buy­ing the shares at least for now.

“They were not con­demned, but we looked at what was bet­ter in terms of re­turns and we felt this was not the right time,” he said.

Asked if SEL was al­lowed to buy shares from a di­rect com­peti­tor of Swazi MTN, SEL Sec­re­tary Khosi Mh­langa said the Joint Ven­ture Agree­ment (JVA) could al­low SEL to buy only less than five per cent of Swazi Mo­bile’s to­tal shares.

The share­hold­ers asked the in­vest­ment com­mit­tee to re­con­sider in­vest­ing in Swazi Mo­bile pro­vided they could still be able to.

“Given the eco­nomic chal­lenges faced by the coun­try, the en­su­ing op­er­at­ing en­vi­ron­ment will be chal­leng­ing, but I am again pos­i­tive that the board of di­rec­tors through its man­age­ment of down­side risk will see SEL per­form well and re­turn strong share­holder value,” he said.

Newspapers in English

Newspapers from Swaziland

© PressReader. All rights reserved.