By By Kwanele Dhladhla
Swazi Empowerment Limited (SEL), one of Eswatini’s largest locally owned investment companies, has reported a steep decline in dividend income from its cornerstone investment in MTN Eswatini, with payouts shrinking by more than E15 million over the past two years.
The figures, disclosed in SEL’s audited financial statements for the year ended March 31, 2025, by Company Secretary Makhosazana Mhlanga, reveal a steady erosion of MTN dividend flows – once the company’s most reliable revenue stream.
In the financial year under review, SEL pocketed E25.17 million in dividends from its 19 percent stake in MTN Eswatini. This was a decline of E6.13 million compared to the E31.3 million received in 2024. The 2023 financial year had been even stronger, when MTN paid SEL E40.56 million in dividends.
Taken together, the three-year sequence reflects a drop of E15.39 million since 2023 – a shift that has forced SEL to accelerate diversification of its portfolio and rely more heavily on newly acquired assets.
The decline does not erase MTN’s importance within SEL’s investment book. During the latest financial year, dividends from MTN accounted for about 73 percent of SEL’s total dividend income of E34.5 million. The balance came primarily from First National Bank (FNB) Eswatini, in which SEL holds a 4.92 percent stake.
By contrast, in previous years, MTN had contributed close to 100 percent of the dividend income – underscoring how quickly the proportions have shifted.
Industry analysts note that the slowdown in MTN Eswatini’s payouts was not unique.
Telecommunications companies across the region have been squeezed by regulatory reforms, the cost of network expansion, and intense competition from emerging digital platforms, coupled with the entrant of a new player in the mobile telephony space in the kingdom following the advent of Eswatini Mobile.
“The telecoms sector has been undergoing a difficult transition, balancing infrastructure investment with maintaining shareholder returns. For investors like SEL, the solution is diversification – and we see that strategy already in motion,” noted an investment consultant familiar with the sector.
RELATED: Data woes rock MTN
SEL’s December 2023 acquisition of a 4.92 percent equity stake in FNB Eswatini has already begun paying dividends. Since the purchase, FNB has contributed E13.53 million in dividends to SEL, giving the company a second reliable income stream.
In addition, SEL has increased exposure to fixed-income instruments. Investments in Select bonds, Eswatini Development Finance Corporation bonds, and Swaziland Building Society permanent shares have delivered strong yields, all above prime lending rates.
These helped offset the reduction in MTN dividends, providing more stability in cash flows.
To further diversify, SEL recently finalized the acquisition of a 49 percent stake in UFS International School, an educational institution with regional ambitions.
The company engaged an independent consultant to conduct a valuation and due diligence on UFS before the deal, ensuring that the purchase price was justified and aligned with long-term investment objectives.
The valuation process considered projected returns, diversification benefits, and the school’s growth potential.
“This rigorous approach ensured that the purchase price was fair and consistent with SEL’s long-term objectives. It demonstrates our commitment to disciplined investment decision-making,” said Mhlanga.
The move marks SEL’s first significant foray into the education sector, an industry seen as resilient and capable of delivering steady returns while contributing to national development.
SEL SOLID FINANCIAL PERFORMANCE AS AT MARCH 31, 2025;
Dividend income: E34.5 million
Interest income: E11 million from fixed-income and money market investments
Operating expenses: E2.6 million
Interest expenses: E10.1 million
This produced a profit before tax of E32.7 million and a net profit of E30.4 million after accounting for taxation.
However, the financials also reflect a significant non-cash fair value adjustment of E163 million on unlisted investments. Moving from the discussion of profit and loss figures, this adjustment, driven by external market conditions, resulted in a comprehensive loss of E132 million for the year.
Management stressed that this accounting adjustment does not erode the underlying strength of the portfolio. Rather, it reflects temporary market conditions that are expected to normalise in the medium term.
SEL’S PORTFOLIO NOW SPANS SEVERAL KEY SECTORS:
19 percent equity stake in MTN Eswatini Limited
4.92 percent equity stake in First National Bank Eswatini Limited
Select Bond (SML 1010)
Eswatini Development Finance Corporation Bond (FIN507)
Swaziland Building Society Permanent Shares
49 percent equity stake in UFS International School
This diversification, the company argues, positions it to withstand volatility in any single sector.
“Diversification of income streams remains a key priority for SEL, as it enhances financial stability and allows the company to continue providing sustainable returns to shareholders,” Mhlanga explained.
The telecommunications sector, while challenged, continues to offer long-term potential. MTN Eswatini retains a dominant market position with extensive 3G and 4G coverage, including in rural areas, and benefits from integration with MTN Group’s wider technological infrastructure. This, SEL believes, will sustain long-term value creation despite current payout declines.
On the banking side, FNB has performed steadily amid a low inflation environment and supportive monetary policy, including three discount rate reductions during the financial year. Such conditions have underpinned profitability in the financial services and fixed-income markets, making SEL’s entry into the banking sector timely.
RELATED: SEL acquires 49% stake in UFS International for E41 mln
The financial statements were audited by SNG Grant Thornton Chartered Accountants (Eswatini), assuring compliance with accounting standards and transparency in reporting.
SEL also reaffirmed its commitment to good governance, aligning itself with the principles of openness, integrity, and accountability as espoused in the King Reports.
“Our board and management remain dedicated to upholding the highest standards of corporate governance,” the company noted.
Looking forward, SEL anticipates consistent performance driven by its balanced portfolio of listed and unlisted investments. The company expects the fair value losses recorded in 2025 to reverse as portfolio companies implement growth strategies and as market conditions stabilize.
With recovery strategies in place, SEL projects sustainable long-term growth and continued contributions to Eswatini’s economic development.
“The environment has its challenges, but our portfolio is structured to deliver value across different economic cycles. We remain committed to enhancing shareholder returns while supporting national development priorities,” SEL said in its outlook statement.
SEL KEY NUMBERS AT A GLANCE:
E40.56m – MTN dividends to SEL in 2023
E31.3m – MTN dividends to SEL in 2024
E25.17m – MTN dividends to SEL in 2025
E15.39m – Two-year decline in MTN dividends
73% – Proportion of SEL’s 2025 dividend income from MTN
E13.53m – FNB dividend contribution since December 2023
E30.4m – Net profit after tax for SEL in 2025
E132m – Comprehensive loss due to fair value adjustments
The decline in MTN dividends marks a turning point for SEL, forcing the company to lean on diversification to maintain profitability and protect shareholder value.
While the telecommunications sector faces headwinds, SEL’s proactive expansion into banking, bonds, and education has provided a cushion and set the stage for more balanced growth in the years ahead.
For investors and shareholders, the message has been clear: SEL is no longer a company tied almost exclusively to MTN’s fortunes. Instead, it is emerging as a diversified investment house with a portfolio designed to weather economic storms while keeping long-term growth in sight.
