Zimbabwe returns 418 hectares to PPC after 12-year wait

The Zimbabwean government has returned 418 hectares of land to cement manufacturer PPC Zimbabwe Limited, more than a decade after seizing the property, in a move valued at a nominal R37 million (US$2,09 million).

The land, originally expropriated in 2012, was officially handed back to PPC in December 2024 via a Deed of Transfer. However, 112 hectares from the original parcel remain outstanding, with the government yet to identify alternative compensation as of March 31, 2025.

The development was disclosed in PPC Limited's audited financial results for the year ended March 31, 2025. PPC Zimbabwe is a subsidiary of the South Africa-based PPC Group. Independent auditors PricewaterhouseCoopers Inc. (PwC) confirmed the transaction in the group's financial statements.

"PPC Zimbabwe Ltd, a subsidiary of the PPC Group, received a free grant from the government of Zimbabwe in the form of 418 hectares of land, measured at a nominal amount of R37 million," PwC said.

The auditors noted that the land was granted unconditionally, classifying it as a government grant in line with International Accounting Standard (IAS) 20. Since the company could not determine a reliable fair value for the land, it was recorded at nominal value.

The land, for now, has no designated use and has been classified as investment property under IAS 40.

"The transfer of the land was initially recognised at a nominal amount of R37 million in terms of IAS20 and classified as investment property in terms of IAS40 as of March 31, 2025," PwC explained.

The grant resulted in a R37 million gain recorded in PPC's income statement for the period. According to the auditors, there were no tax implications associated with the land transfer under the applicable laws.

PPC, which holds an 88% stake in its Zimbabwean operations, partners with the National Indigenisation and Economic Empowerment Fund, which owns the remaining 12%. However, the fund is only entitled to 5% of any dividends declared.

The cement producer saw a 5,5% decline in sales volumes year-on-year, though volumes recovered in the second half of financial 2025 as cement imports stabilised.

Revenue for the year slipped 6,7% to R3,122 billion (US$175,6 million), but cost-cutting measures led to a 46% rise in profit after tax, which reached R470 million (US$26,5 million). The gains were supported by a 14,4% reduction in the cost of sales and a R46 million (US$2,6 million) cut in administrative and operating expenses.

As of March 31, 2025, PPC Zimbabwe's total assets stood at R3,04 billion (US$171,58 million), up from R2,87 billion (US$162 million) the previous year.

While the land restitution marks a significant development for PPC Zimbabwe, the company is still awaiting resolution over the remaining 112 hectares, as authorities continue to search for suitable compensatory land.