Sabesp reported on Monday (10) adjusted net profit of R$1.28 billion in the third quarter, 9.5% higher than the result on the same basis obtained a year ago and in line with market expectations, according to a balance sheet that showed stability in revenues and a decline in costs.
The company, which claims to be the third largest water and wastewater company in the world, achieved an operating performance measured by adjusted EBITDA of R$3.2 billion, 14.7% higher than recorded in the previous year.
Analysts, on average, expected a profit of R$1.28 billion and EBITDA of R$3.25 billion for Sabesp in the third quarter, according to forecasts compiled by IBES, from LSEG.
Sabesp generated net operating income of R$5.47 billion in the period from July to the end of September, practically stable compared to revenues for the same period in 2024. At the same time, costs and expenses fell by approximately 16%, reaching R$2.26 billion, also in adjusted terms.
A year after the company’s privatization, Sabesp had to deal in the third quarter with a worsening decline in the level of water reservoirs in the state of São Paulo, partly affected by below-average rainfall during that period.
The region’s dams held 28.2% of storage on Monday, less than 31.5% at the end of the last quarter.
The company’s chief financial officer, Daniel Slack, said in an interview with Reuters that although the level of reservoirs is “in a slightly worse shape than in history,” the hydrological year has just begun and springs in November are starting to “rise” in the first days of the month.
Slack explained that by 2026, about 8 cubic meters per second will be added, within a total estimated at 22 cubic meters by 2030, as the company implements works that include water reuse projects, feeding springs, and connecting springs.
In this sense, the purchase of São Paulo state-owned Imai at the beginning of October gave the company access to the Billings Reservoir and the water potential accessible through the Tete and Pinheiros river cleanup project, which could be used to recharge the water source by 2030.
“We still have to connect the new systems, and we have to finish the ring road,” Slack said, referring to the work that will connect the new dams to the existing integrated system.
In the last quarter, SABIS added 91,000 water connections, 175,000 sewage connections, and 350,000 treatment connections. Achieving universalization goals by 2029 was 141% in water supply, 125% in sanitation, and 92% in treatment.
In response to a question about the process of reviewing the first tariff after privatization, Slack avoided mentioning the company’s expectations for the decision of the regulatory agency Arsesp, which should publish between the end of November and the beginning of December the tariff index scheduled to be applied from January onwards.
But the CEO pointed out that the company’s contract includes accounting for the company’s asset base, which has been reduced to a minimum through the use of the Sanitation Universalization Support Fund (FAUSP).
He added, “This first year (the tariff adjustment) hurts more, but at the end of 2029 or 2030, the damage will be less.”
Regarding large consumers, who were enjoying discounts on Sabesp accounts before the privatization, the executive stated that the company collected R$130 million and R$140 million in the third quarter as a result of the removal of these discounts, and that after the second wave of reviews from these customers in the second quarter, “this issue will be resolved.”
The company, which is expected to invest R$70 billion to achieve its circularization goals by 2029, has already raised R$13 billion of financing from R$40 billion to R$50 billion, the executive said.
Sabesp ended September with cash of R$11.6 billion and leverage measured as net debt over adjusted EBITDA of 1.9 times compared to 1.7 times at the end of last year’s third quarter.
“It does not make sense to collect everything now, especially since the cost of money is high,” Szlak said, adding that the company is “currently raising an additional amount of R$5 billion that must be settled by the 14th.”
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