SABESP - Companhia de Saneamento Básico do Estado de São Paulo
SABESP - Companhia de Saneamento Básico do Estado de São Paulo
09/30/2024 | Press release | Distributed by Public on 09/30/2024 04:02
Earnings Results 2Q24 Form 6 K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For August, 2024
(Commission File No. 1-31317)
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
(Exact name of registrant as specified in its charter)
Basic Sanitation Company of the State of Sao Paulo - SABESP
(Translation of Registrant's name into English)
Rua Costa Carvalho, 300
São Paulo, S.P., 05429-900
Federative Republic of Brazil
São Paulo, S.P., 05429-900
Federative Republic of Brazil
(Address of Registrant's principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7)__.
in paper as permitted by Regulation S-T Rule 101(b)(7)__.
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes ______ No ___X___
If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
registrant in connection with Rule 12g3-2(b):
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Earnings |
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| Highlights |
Adjusted EBITDA(*) totaled R$ 2,970.5 million in 2Q24, up by R$ 778.1 million (+35.5%) over the R$ 2,192.4 million reported in 2Q23. Consequently, the adjusted EBITDA margin reached 54.2% compared to 44.8%.
Net income came to R$ 1,209.4 million in 2Q24, up by R$ 465.7 million (+62.6%) over the R$ 743.7 million recorded in 2Q23.
Revenue from sanitation services
Increase of R$ 740.6 million (+14.3%) over 2Q23, impacted by (i) a 9.6% tariff adjustment since May 2023; (ii) a 6.4% tariff adjustment since May 2024; and (iii) a 3.2% increase in total billed volume.
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | |
| Revenues from sanitation services | 5,932.9 | 5,192.3 | 740.6 | 14.3 |
| Billed volume (million m3) | 1,080.3 | 1,047.2 | 33.1 | 3.2 |
| Average tarifs (R$/m³) | 5.5 | 5.0 | 0.5 | 10.8 |
Impacts from the exchange variation
In 2Q24, the exchange variation was negative, due to the appreciation of the U.S. dollar and Yen in the period, compared to a positive variation reported in 2Q23, as a result of the depreciation, as shown below.
| 2Q24 | 2Q23 | |
| Foreign currency debt - R$ million | 2,899.4 | 2,475.7 |
| Foreign currency debt as a percentage of total debt - % | 13.3 | 13.2 |
| U.S. dollar variation in the quarter - % | 11.2 | (5.1) |
| Yen variation in the quarter - % | 4.7 | (12.8) |
The Company contracted derivative financial instruments (hedge) with Bank of America Merrill Lynch, Múltiplo S.A., CitiBank S.A., Itaú Unibanco Holding S.A., J.P. Morgan, and Banco Santander (Brazil) S.A., according to the Financial Risk Policy, used from April 10, 2024 to April 16, 2024, to mitigate the exchange risk, with a corresponding average cost of approximately DI+0.13% p.a. As of June 30, 2024, 12 swap transactions were in effect, with a notional value of US$ 272,009 thousand and ¥ 38,932,983 thousand to hedge the interest rate and exchange variation. The agreements are valid until December 2024.
Financial expenses related to foreign currency agreements, excluding the effects of the hedge operation, totaled R$ 246.9 million in 2Q24. Given that the hedge operations were contracted in April 2024, there was a period during which the risk of exchange rate variation was not protected, impacting R$ 104.0 million of this total. Hedge gains came to R$ 91.6 million in the period; therefore, total financial expenses, net of the hedge operation, totaled R$ 155.3 million.
(*) excluding the IDP/AAPS/Construction Margin
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Earnings |
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| 1. | Result for the period (Consolidated) |
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | 1H24 | 1H23 | Var. (R$) | % | ||
| Revenue from sanitation services | 5,932.9 | 5,192.3 | 740.6 | 14.3 | 11,594.0 | 10,101.6 | 1,492.4 | 14.8 | |
| COFINS and PASEP/TRCF taxes | (457.3) | (301.0) | (156.3) | 51.9 | (894.9) | (691.4) | (203.5) | 29.4 | |
| (=) | Revenue from sanitation services, net | 5,475.6 | 4,891.3 | 584.3 | 11.9 | 10,699.1 | 9,410.2 | 1,288.9 | 13.7 |
| Construction revenue | 1,273.8 | 1,263.2 | 10.6 | 0.8 | 2,610.6 | 2,442.8 | 167.8 | 6.9 | |
| (=) | Net operating income | 6,749.4 | 6,154.5 | 594.9 | 9.7 | 13,309.7 | 11,853.0 | 1,456.7 | 12.3 |
| Construction costs | (1,245.2) | (1,234.8) | (10.4) | 0.8 | (2,551.9) | (2,387.8) | (164.1) | 6.9 | |
| Costs and expenses | (3,302.4) | (3,909.4) | 607.0 | (15.5) | (6,909.8) | (7,083.2) | 173.4 | (2.4) | |
| Other operating income (expenses), net | 6.8 | 50.5 | (43.7) | (86.5) | 13.9 | 65.1 | (51.2) | (78.6) | |
| Equity results | 7.9 | 10.0 | (2.1) | (21.0) | 16.7 | 16.4 | 0.3 | 1.8 | |
| (=) | Earnings before financial result, income tax, and social contribution | 2,216.5 | 1,070.8 | 1,145.7 | 107.0 | 3,878.6 | 2,463.5 | 1,415.1 | 57.4 |
| Financial result | (461.9) | (14.0) | (447.9) | 3,199.3 | (800.1) | (273.6) | (526.5) | 192.4 | |
| (=) | Earnings before income tax and social contribution | 1,754.6 | 1,056.8 | 697.8 | 66.0 | 3,078.5 | 2,189.9 | 888.6 | 40.6 |
| Income tax and social contribution | (545.2) | (313.1) | (232.1) | 74.1 | (1,045.8) | (698.8) | (347.0) | 49.7 | |
| (=) | Net income | 1,209.4 | 743.7 | 465.7 | 62.6 | 2,032.7 | 1,491.1 | 541.6 | 36.3 |
| Earnings per share (R$)* | 1.77 | 1.09 | 2.97 | 2.18 |
* Number of shares = 683,509,869
The net revenue from sanitation services totaled R$ 5,475.6 million in 2Q24, an increase of 11.9% over 2Q23.
Costs and expenses totaled R$ 3,302.4 million, a decrease of R$ 607.0 million (-15.5%).
The Company recorded a net income of R$ 1,209.4 million in 2Q24, compared to R$ 743.7 million in 2Q23.
Adjusted EBITDA Reconciliation (Non-accounting measures)
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | 1H24 | 1H23 | Var. (R$) | % | ||
| Net income | 1,209.4 | 743.7 | 465.7 | 62.6 | 2,032.7 | 1,491.1 | 541.6 | 36.3 | |
| IDP | - | 529.6 | (529.6) | - | - | 529.6 | (529.6) | - | |
| Agreement with AAPS | - | - | - | - | 162.4 | - | 162.4 | - | |
| (=) | Adjusted Net Income (excluding the IDP/AAPS) | 1,209.4 | 1,273.3 | (63.9) | (5.0) | 2,195.1 | 2,020.7 | 174.4 | 8.6 |
| Income tax and social contribution | 545.2 | 313.1 | 232.1 | 74.1 | 1,045.8 | 698.8 | 347.0 | 49.7 | |
| Financial result | 461.9 | 14.0 | 447.9 | 3,199.3 | 800.1 | 273.6 | 526.5 | 192.4 | |
| Other operating income (expenses), net | (6.8) | (50.5) | 43.7 | (86.5) | (13.9) | (65.1) | 51.2 | (78.6) | |
| Depreciation and amortization | 789.4 | 670.9 | 118.5 | 17.7 | 1,563.2 | 1,327.9 | 235.3 | 17.7 | |
| Construction margin | (28.6) | (28.4) | (0.2) | 0.7 | (58.7) | (55.0) | (3.7) | 6.7 | |
| (=) | Adjusted EBITDA (excluding the IDP/AAPS/Construction Margin)* | 2,970.5 | 2,192.4 | 778.1 | 35.5 | 5,531.6 | 4,200.9 | 1,330.7 | 31.7 |
| (%) Adjusted EBITDA margin (excluding the IDP/AAPS/Construction Margin) | 54.2 | 44.8 | 51.7 | 44.6 |
* The EBITDA and EBITDA margin above are not the same as those used for the purposes of covenants.
Adjusted EBITDA was R$ 2,970.5 million in 2Q24, with an adjusted EBITDA margin of 54.2% (44.8% in 2Q23).
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Earnings |
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| 2. | Revenue from sanitation services |
The gross operating income from sanitation services, which excludes construction revenue, totaled R$ 5,932.9 million in 2Q24, an increase of R$ 740.6 million (+14.3%) over the R$ 5,192.3 million recorded in 2Q23.
The main factors that led to the increase were:
| · | Tariff adjustment of 9.6% since May 2023; |
| · | Tariff adjustment of 6.4% since May 2024; and |
| · | An increase of 3.2% in the total billed volume. |
Revenue from sanitation services increased by R$ 1,492.4 million (+14.8%) in 1H24, moving up from R$ 10,101.6 million to R$ 11,594.0 million, mainly due to:
| · | Tariff adjustment of 9.6% since May 2023; |
| · | Tariff adjustment of 6.4% since May 2024; and |
| · | An increase of 4.5% in the total billed volume. |
| 3. | TAX (COFINS AND PASEP/ TRCF) |
The increase in expenses is mainly due to the 14.8% increase in revenue and the adjustment in tax credits that occurred in 2Q23, non-recurring, in the amount of R$ 81.6 million.
| 4. | construction revenue |
Construction revenue increased by R$ 10.6 million, due to higher investments made.
In 1H24, construction revenue increased by R$ 167.8 million (+6.9%).
| 5. | Billed volume |
The following tables show the water and sewage billed volumes, on a quarter-over-quarter and year-over-year basis, per customer category:
| WATER AND SEWAGE BILLED VOLUME1 PER CUSTOMER CATEGORY - million m3 | |||||||||
| Water | Sewage | Water + Sewage | |||||||
| Category | 2Q24 | 2Q23 | % | 2Q24 | 2Q23 | % | 2Q24 | 2Q23 | % |
| Residential | 489.9 | 476.9 | 2.7 | 431.5 | 418.7 | 3.1 | 921.4 | 895.6 | 2.9 |
| Commercial | 47.7 | 47.7 | - | 46.3 | 45.5 | 1.8 | 94.0 | 93.2 | 0.9 |
| Industrial | 9.3 | 8.8 | 5.7 | 9.8 | 9.6 | 2.1 | 19.1 | 18.4 | 3.8 |
| Public | 13.3 | 12.1 | 9.9 | 12.1 | 10.9 | 11.0 | 25.4 | 23.0 | 10.4 |
| Total retail | 560.2 | 545.5 | 2.7 | 499.7 | 484.7 | 3.1 | 1,059.9 | 1,030.2 | 2.9 |
| Wholesale2 | 12.3 | 11.6 | 6.0 | 5.4 | 5.4 | - | 17.7 | 17.0 | 4.1 |
| Grand Total | 572.5 | 557.1 | 2.8 | 505.1 | 490.1 | 3.1 | 1,077.6 | 1,047.2 | 2.9 |
| Olímpia | 1.3 | - | - | 1.4 | - | - | 2.7 | - | - |
| Consolidated Grand Total | 573.8 | 557.1 | 3.0 | 506.5 | 490.1 | 3.3 | 1,080.3 | 1,047.2 | 3.2 |
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Earnings |
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| Water | Sewage | Water + Sewage | |||||||
| Category | 1H24 | 1H23 | Var. % | 1H24 | 1H23 | Var. % | 1H24 | 1H23 | Var. % |
| Residential | 988.1 | 948.6 | 4.2 | 868.8 | 831.1 | 4.5 | 1,856.9 | 1,779.7 | 4.3 |
| Commercial | 94.9 | 94.1 | 0.9 | 91.8 | 89.2 | 2.9 | 186.7 | 183.3 | 1.9 |
| Industrial | 18.2 | 17.4 | 4.6 | 19.3 | 19.0 | 1.6 | 37.5 | 36.4 | 3.0 |
| Public | 24.7 | 22.2 | 11.3 | 22.4 | 20.0 | 12.0 | 47.1 | 42.2 | 11.6 |
| Total retail | 1,125.9 | 1,082.3 | 4.0 | 1,002.3 | 959.3 | 4.5 | 2,128.2 | 2,041.6 | 4.2 |
| Wholesale2 | 23.9 | 23.8 | 0.4 | 11.1 | 10.8 | 2.8 | 35.0 | 34.6 | 1.2 |
| Grand Total | 1,149.8 | 1,106.1 | 4.0 | 1,013.4 | 970.1 | 4.5 | 2,163.2 | 2,076.2 | 4.2 |
| Olímpia | 2.6 | - | - | 2.9 | - | - | 5.5 | - | - |
| Consolidated Grand Total | 1,152.4 | 1,106.1 | 4.2 | 1,016.3 | 970.1 | 4.8 | 2,168.7 | 2,076.2 | 4.5 |
1. Not reviewed by external auditors
2. Wholesale includes volumes of reuse water and non-domestic sewage
| 6. | Costs, administrative & selling expenses |
Costs, administrative and selling expenses decreased by R$ 607.0 million in 2Q24 (-15.5%).
Costs, administrative, and selling expenses as a percentage of net revenue from sanitation services were 60.3% in 2Q24 compared to 69.1% in 2Q23.
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | 1H24 | 1H23 | Var. (R$) | % | |
| Salaries, payroll charges and benefits, and Pension plan obligations | 748.7 | 1,347.4 | (598.7) | (44.4) | 1,457.1 | 2,091.6 | (634.5) | (30.3) |
| IDP | - | 529.6 | (529.6) | (100.0) | - | 529.6 | (529.6) | (100.0) |
| Salaries, payroll charges and benefits, and pension plan obligations (excluding the IDP) | 748.7 | 817.8 | (69.1) | (8.4) | 1,457.1 | 1,562.0 | (104.9) | (6.7) |
| General supplies | 85.3 | 90.4 | (5.1) | (5.6) | 176.1 | 177.9 | (1.8) | (1.0) |
| Treatment supplies | 124.3 | 138.5 | (14.2) | (10.3) | 265.6 | 303.4 | (37.8) | (12.5) |
| Services | 663.2 | 643.1 | 20.1 | 3.1 | 1,346.0 | 1,268.1 | 77.9 | 6.1 |
| Electricity | 387.1 | 386.8 | 0.3 | 0.1 | 781.4 | 782.6 | (1.2) | (0.2) |
| General expenses | 413.5 | 395.6 | 17.9 | 4.5 | 1,018.5 | 710.4 | 308.1 | 43.4 |
| Agreement with AAPS | - | - | - | - | 162.4 | - | 162.4 | - |
| Share of the municipal government in the collection (São Paulo) | 186.6 | 166.0 | 20.6 | 12.4 | 356.7 | 315.6 | 41.1 | 13.0 |
| Share of the municipal government in the collection (other municipalities) | 67.1 | 41.0 | 26.1 | 63.7 | 142.1 | 77.9 | 64.2 | 82.4 |
| Other general expenses | 159.8 | 188.6 | (28.8) | (15.3) | 357.3 | 316.9 | 40.4 | 12.7 |
| Tax expenses | 19.3 | 19.3 | - | - | 39.7 | 41.1 | (1.4) | (3.4) |
| Depreciation and amortization | 789.4 | 670.9 | 118.5 | 17.7 | 1,563.2 | 1,327.9 | 235.3 | 17.7 |
| Allowance for doubtful accounts | 71.6 | 217.4 | (145.8) | (67.1) | 262.2 | 380.2 | (118.0) | (31.0) |
| Costs, administrative & selling expenses | 3,302.4 | 3,909.4 | (607.0) | (15.5) | 6,909.8 | 7,083.2 | (173.4) | (2.4) |
| % of net revenue (excluding construction revenue) | 60.3 | 79.9 | 64.6 | 75.3 | ||||
| % of net revenue (excluding construction revenue, IDP, and AAPS) | 60.3 | 69.1 | 63.1 | 69.6 |
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Earnings |
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SALARIES, PAYROLL CHARGES AND BENEFITS, AND PENSION PLAN OBLIGATIONS
The R$ 598.7 million decrease (-44.4%) reported in 2Q24 was mainly due to the non-recurring provision recognized for employees who joined the Incentivized Dismissal Program (IDP) in 2Q23, of R$ 529.6 million. The average number of employees fell by 14.7%, mainly as a result of this program.
The aforementioned decrease was partially offset by the 2.0% application in February 2024 referring to the Career and Salary Plan, and the 2.77% salary adjustment in May 2024.
In 1H24, the decrease was R$ 634.5 million (-30.3%), as a result of the aforementioned factors.
TREATMENT SUPPLIES
Treatment supplies fell by R$ 14.2 million (-10.3%) in 2Q24 compared to 2Q23.
The decrease was mainly due to:
| · | Strategies implemented for the replacement and combined use of chemicals; and |
| · | Optimization of water source usage, resulting in reduced use of algaecides, coagulants, and disinfectants. The Company manages the use of chemicals and the advancement or retreat of the Production Systems by using systems that provide the best cost-effectiveness. |
In 1H24, the decrease came to R$ 37.8 million (-12.5%).
SERVICES
Service expenses totaled R$ 663.2 million, an increase of R$ 20.1 million (+3.1%) over the R$ 643.1 million recorded in 2Q23. The main increases were:
| · | R$ 12.4 million with advertising and marketing expenses; and |
| · | R$ 6.2 million with the hiring of outsourced labor. |
In 1H24, the decrease was R$ 77.9 million (-6.1%), mainly due to:
| · | R$ 47.7 million for the maintenance of water and sewage networks, connections, and systems; |
| · | R$ 12.6 million with customer services; and |
| · | R$ 7.6 million with environmental compensation services. |
ELECTRICITY
Electricity expenses totaled R$ 387.1 million in 2Q24, an increase of R$ 0.3 million (+0.1%) over the R$ 386.8 million recorded in 2Q23. Of the total, the Free Market Tariffs (ACL) accounted for 51.9% of total expenses in 2Q24 (54.3% in 2Q23) while the Regulated Market Tariffs (ACR) accounted for 48.1% (45.7% in 2Q23).
The main factors that contributed to this variation were:
| · | An average decrease of 0.7% in ACL prices (including Grid Market Tariffs - TUSD), with a 9.5% increase in consumption; and |
| · | An average increase of 8.0% in ACR tariffs, with no significant variation in consumption. |
The R$ 1.2 million decrease (-0.2%) recorded in 1H24 was due to:
| · | An average decrease of 2.7% in ACL prices (including Grid Market Tariffs - TUSD), with a 1.8% increase in consumption; and |
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Earnings |
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| · | An average increase of 8.3% in ACR tariffs, with no significant variation in consumption. |
Consumption in Megawatt-hours in 2Q24 is distributed as follows: 66.1% in the the Free Market Tariffs (ACL) and 33.9% in the Regulated Market Tariffs (ACR), and in the same period of 2023, it represented 64.1% and 35.9%, respectively. The increase in contracting in the free market is in line with the strategy of optimizing the cost of electricity.
GENERAL EXPENSES
Increase of R$ 17.9 million (+4.5%), totaling R$ 413.5 million in 2Q24, compared to the R$ 395.6 million recorded in 2Q23, mainly from the higher provision for transfer to the Municipal Funds for Environmental Sanitation and Infrastructure, of R$ 46.7 million; partially offset by lower expenses with lawsuits, of R$ 26.7 million.
Expenses with municipal transfers totaled R$ 253.7 million in 2Q24, compared to the R$ R$ 207.0 million reported in 2Q23. Expenses with the use of water came to R$ 24.8 million in 2Q24, compared to the R$ 27.6 million recorded in 2Q23.
R$ million
| MUNICIPAL TRANSFERS | |||||
| Municipality | 2Q24 | 2Q23 | Var. (R$) | % | Start |
| São Paulo | 186.6 | 166.0 | 20.6 | 12.4 | Jun/10 |
| Guarulhos | 9.4 | - | 9.4 | - | Dec/23 |
| Barueri | 3.3 | - | 3.3 | - | May/23 |
| Diadema | 2.9 | - | 2.9 | - | Jul/23 |
| Hortolândia | 2.2 | - | 2.2 | - | Feb/24 |
| Other municipalities | 49.3 | 41.0 | 8.3 | 20.2 | |
| Total | 253.7 | 207.0 | 46.7 | 22.6 |
The R$ 308.1 million increase (+43.4%) in 1H24 was due to:
| · | Provision of R$ 162.4 million in 1Q24, referring to the agreement with AAPS; |
| · | Higher provision for transfer to the Municipal Funds for Environmental Sanitation and Infrastructure, of R$ 105.3 million; and |
| · | Increase of R$ 42.0 million in expenses with lawsuits. |
Expenses with municipal transfers totaled R$ 498.8 million in 1H24, compared to the R$ R$ 393.5 million reported in 1H23. Expenses with the use of water came to R$ 49.8 million in 1H24, compared to the R$ 52.8 million recorded in 1H23.
DEPRECIATION AND AMORTIZATION
Increase of R$ 118.5 million (+17.7%) (R$ 235.3 million (+17.7%) in 1H24), due to the beginning of operations of intangible assets, totaling R$ 7.1 billion.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Decrease of R$145.8 million or 67.1%, from R$217.4 million in 2Q23 to R$71.6 million in 2Q24, as a result of another Feirão, structured collection actions, an increase in the volume of cuts and suppressions, and agreements with large consumers. The latter brought a non-recurring positive impact of R$76.5 million. The % PECLD/Sanitation Revenue closed the first half of 2024 at 2.3%, accumulated and excluding the non-recurring effect, it represented 2.9%, below the 3% presented in 2023.
The decrease came to R$ 118.0 million (-31.0%) in 1H24.
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Earnings |
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| 7. | Other net operating income (expenses) |
Decrease of R$ 43.7 million, mainly due to the higher application of contractual fines charged from suppliers in 2Q23, of R$ 45.5 million.
In 1H24, the R$ 51.2 million decrease was mainly due to (i) the R$ 43.0 million reduction in contractual fines charged from suppliers; and (ii) revenue from the sale of unusable materials in 1H23, non-recurring, of R$ 6.1 million.
| 8. | Financial result |
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | |
| Financial expenses, net of revenue | (379.5) | (219.4) | (160.1) | 73.0 |
| Monetary and exchange variations, net | (82.4) | 205.4 | (287.8) | (140.1) |
| Financial Result | (461.9) | (14.0) | (447.9) | 3,199.3 |
Financial expenses, net of revenue
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | |
| Financial expenses | ||||
| Interest and charges on domestic borrowings and financing | (321.9) | (254.0) | (67.9) | 26.7 |
| Interest and charges on international borrowings and financing | (30.8) | (23.2) | (7.6) | 32.8 |
| Other financial expenses | (213.7) | (96.4) | (117.3) | 121.7 |
| Total financial expenses | (566.4) | (373.6) | (192.8) | 51.6 |
| Financial revenue | 186.9 | 154.2 | 32.7 | 21.2 |
| Financial expenses, net of revenue | (379.5) | (219.4) | (160.1) | 73.0 |
The main impacts resulted from:
| · | Increase of R$ 67.9 million in interest and charges on domestic borrowings and financing, mainly due to the 31st issue debentures and IFC 2023 fundraising; |
| · | Increase of R$ 7.6 million in interest and charges on international borrowings and financing, due to new IDB fundraising; |
| · | Increase of R$ 117.3 million in other financial expenses, mainly due to (i) an R$ 86.3 million increase in interest on Public-Private Partnership - PPP; and (ii) an R$ 15.3 million increase in interest on lawsuits; and |
| · | Increase of R$ 32.7 million in financial revenues, mainly due to higher revenue on financial investments in 2Q24, as a result of the higher cash balance. |
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Earnings |
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Monetary and exchange variations, net
R$ million
| 2Q24 | 2Q23 | Var. (R$) | % | |
| Monetary and exchange variations on liabilities | ||||
| Monetary variations on borrowings and financing | (23.1) | (38.1) | 15.0 | (39.4) |
| Exchange variations on borrowings and financing | (216.1) | 263.7 | (479.8) | (181.9) |
| Gains/(Losses) with derivative financial instruments | 91.6 | - | 91.6 | - |
| Other monetary variations | (43.8) | (71.2) | 27.4 | (38.5) |
| Total monetary and exchange variations on liabilities | (191.4) | 154.4 | (345.8) | (224.0) |
| Monetary and exchange variations on assets | 109.0 | 51.0 | 58.0 | 113.7 |
| Monetary and exchange variations, net | (82.4) | 205.4 | (287.8) | (140.1) |
The negative effect of net monetary and exchange variations in 2Q24 was R$ 287.8 million, especially due to:
| · | A decrease of R$ 15.0 million in monetary variations on borrowings and financing, mainly because of (i) a decrease in IPCA (from 1.56% in 2Q23 to 1.0% in 2Q24); and (ii) higher capitalization of monetary variation on debentures in 2Q24, of R$ 5.5 million; |
| · | An increase of R$ 479.8 million in exchange variations on loans and financing, due to the appreciation of the U.S. dollar and the Yen in 2Q24 (11.3% and 4.7%, respectively), compared to the depreciation occurred in 2Q23 (-5.1% and -12.8%, respectively); |
| · | Gains with derivative financial instruments, of R$ 91.6 million; |
| · | A decrease of R$ 27.4 million in other monetary variations, mainly due to lower monetary variation on Public-Private Partnership (PPP) in 2Q24, of R$ 40.6 million, partially offset by higher monetary variation on transfers to municipalities, of R$ 7.4 million; and |
| · | An increase of R$ 58.0 million in monetary variations on assets, mainly due to higher monetary variation on agreements in 2Q24. |
| 9. | Income tax and social contribution |
In 2Q24, the increase was R$ 232.1 million (+74.1%), mainly due to:
| · | An increase of R$ 594.9 million in net operating revenue; and |
| · | A decrease of R$ 607.0 million in costs and expenses. |
The factors above were partially offset by the negative variation of R$ 447.9 million in the financial result.
|
Earnings |
|
| Page 11 |
| 10. | Indicators |
| a) | operational |
| Operational indicators* | 2Q24 | 2Q23 | % |
| Water Connections1 | 10,336 | 10,242 | 0.9 |
| Sewage Connections1 | 8,833 | 8,728 | 1.2 |
| Population Directly Served - Water2 | 28.1 | 28.1 | 0.0 |
| Population Directly Served - Sewage2 | 24.9 | 24.8 | 0.4 |
| Number of Employees | 10,158 | 12,221 | (16.9) |
| Volume of water produced in the quarter3 | 770 | 734 | 4.9 |
| Volume of water produced in the year3 | 1,542 | 1,467 | 5.1 |
| IPM - Measured Water Loss (%) | 29 | 30 | (1.4) |
| IPDt (liters/connection x day)3 | 262 | 256 | 2.3 |
1. Active connections in thousand units at the end of the period.
2. In million inhabitants, at the end of the period. Does not include wholesale.
3. Millions of m3.
* Unaudited by external auditors
| b) | Economic |
| Economic variables at the close of the quarter* | 2Q24 | 2Q23 |
| IPCA - Amplified Consumer Price Index1 | 1.00 | 1.56 |
| INPC - National Consumer Price Index² | 1.08 | 0.79 |
| IPC - Consumer Price Index² | 0.69 | 0.60 |
| DI - Interbank Deposit³ | 10.51 | 13.65 |
| U.S. dollar4 | 5.56 | 4.82 |
| Japanese yen4 | 0.03 | 0.03 |
1. Accrued in the quarter ended "May/24 x May/23"
2. Accrued in the quarter (%)
3. Average quarterly rate (%)
.4. Ptax sale rate on the last day
* Unaudited by external auditors
|
Earnings |
|
| Page 12 |
| 11. | Borrowings and financing |
R$ Thousand
| DEBT PROFILE | |||||||||
| INSTITUTION | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 onwards | TOTAL | % of Total |
| Local currency | |||||||||
| Caixa Econômica Federal | 57,230 | 119,788 | 127,262 | 135,191 | 143,481 | 149,106 | 933,896 | 1,665,954 | 8 |
| IDB | 125,654 | 260,899 | 330,209 | 315,069 | 420,959 | 383,940 | 1,974,383 | 3,811,113 | 18 |
| IFC | 11,400 | 44,200 | 61,800 | 80,800 | 123,600 | 181,600 | 1,209,202 | 1,712,602 | 8 |
| Debentures | 362,440 | 1,319,166 | 1,219,530 | 1,395,509 | 668,031 | 1,303,628 | 3,231,065 | 9,499,369 | 44 |
| BNDES | 140,863 | 261,230 | 251,277 | 238,513 | 84,491 | 34,244 | 189,898 | 1,200,516 | 6 |
| Other | 284 | 568 | 142 | - | - | - | - | 994 | 0 |
| Leases (concession agreements, program contracts, and contract asset)1 | 54,587 | 25,417 | 25,417 | 25,417 | 25,417 | 23,515 | 134,789 | 314,559 | 0 |
| Leases (others)2 | 25,187 | 86,164 | 60,423 | 1,524 | 8,566 | - | - | 181,864 | 1 |
| Interest and other charges | 420,751 | 69,732 | - | - | - | - | - | 490,483 | 2 |
| Total in local currency | 1,198,396 | 2,187,164 | 2,076,060 | 2,192,023 | 1,474,545 | 2,076,033 | 7,673,233 | 18,877,454 | 87 |
| Foreign currency | |||||||||
| IDB | 28,567 | 79,398 | 44,526 | 44,526 | 44,526 | 44,526 | 619,942 | 906,011 | 4 |
| IBRD | 16,898 | 33,796 | 33,796 | 33,796 | 33,796 | 49,070 | 420,928 | 622,080 | 3 |
| JICA | 74,145 | 148,290 | 148,290 | 148,290 | 148,290 | 148,182 | 527,697 | 1,343,184 | 6 |
| Interest and other charges | 28,079 | - | - | - | - | - | - | 28,079 | 0 |
| Total in foreign currency | 147,689 | 261,484 | 226,612 | 226,612 | 226,612 | 241,778 | 1,568,567 | 2,899,354 | 13 |
| Total | 1,346,085 | 2,448,648 | 2,302,672 | 2,418,635 | 1,701,157 | 2,317,811 | 9,241,800 | 21,776,808 | 100 |
1. Refers to work contracts signed as Assets Lease;
2. Obligations related to leasing agreements, mainly vehicle leases.
Covenants
The table below shows the most restrictive clauses in 2Q24:
| Covenants | |
| Adjusted EBITDA / Adjusted Financial Expenses | Equal to or higher than 2.80 |
| EBITDA / Financial Expenses Paid | Equal to or higher than 2.35 |
| Adjusted Net Debt / Adjusted EBITDA | Equal to or lower than 3.80 |
| Net Debt / Adjusted EBITDA | Equal to or lower than 3.50 |
| Other Onerous Debt1 / Adjusted EBITDA | Equal to or lower than 1.30 |
1. "Other Onerous Debts" correspond to the sum of pension plan obligations and healthcare plan, installment payment of tax debts, and installment payment of debts with the electricity supplier.
In 2Q24 and 2Q23, the Company met the requirements of its borrowings and financing agreements.
|
Earnings |
|
| Page 13 |
| 12. | Investments |
Investments totaled R$ 1,296.6 million in 2Q24, while cash disbursed for investments, including from previous periods, totaled R$ 1,151.4 million.
The table below shows investments broken down by water and sewage:
R$ million
| Water | Sewage | Total | |
| Investments | 549.2 | 747.4 | 1,296.6 |
In relation to 1H24, the investment made was R$2,717.0 million, of which R$1,217.6 million in water and R$1,499.4 million in sewage. The accumulated cash disbursement related to the investments made, including from previous periods, was R$1,738.8 million.
| 13. | Public-Private Partnership - PPP |
The chart below shows expenses with Public-Private Partnerships in 2Q24, compared to the figures reported in 2Q23:
R$ thousand
| SÃO LOURENÇO PRODUCTION SYSTEM | 2Q24 | 2Q23 | Var. (R$) | % |
| General Supplies | 4,975.6 | 4,864.6 | 111.0 | 2.3 |
| Services | 10,498.8 | 10,264.5 | 234.3 | 2.3 |
| General Expenses | 1,374.9 | 1,344.2 | 30.7 | 2.3 |
| Amortization | 41,682.10 | 42,474.50 | -792.4 | -1.9 |
| Financial Expenses | 119,253.2 | 81,915.8 | 37,337.4 | 45.6 |
| Total | 177,784.60 | 140,863.60 | 36,921.00 | 26.2 |
| ALTO TIETÊ PRODUCTION SYSTEM | 2Q24 | 2Q23 | Var. (R$) | % |
| Services | - | 18,568.1 | (18,568.1) | (100.0) |
| Amortization | 4,065.8 | 4,078.3 | (12.5) | (0.3) |
| Financial Expenses | - | 5,425.1 | (5,425.1) | (100.0) |
| Total | 4,065.8 | 28,071.5 | (24,005.7) | (85.5) |
| Total expenses with PPP | 181,850.40 | 168,935.10 | 12,915.30 | 7.6 |
|
Earnings |
|
| Page 15 |
Holding - Income Statement
| Income Statement (R$ Thousand) | ||
| 2Q24 | 2Q23 | |
| Water Revenue | 3,142,900 | 2,749,015 |
| Sewage Revenue | 2,752,827 | 2,417,527 |
| TRCF | 29,215 | 25,734 |
| Gross Sanitation Services Revenue | 5,924,942 | 5,192,276 |
| Cofins Pasep e TRCF | (456,925) | (300,973) |
| Net Sanitation Services Revenue | 5,468,017 | 4,891,303 |
| Construction Revenue | 1,271,834 | 1,263,234 |
| Net Operating Income | 6,739,851 | 6,154,537 |
| Construction Cost | (1,243,240) | (1,234,832) |
| Salaries, charges and benefits and social security obligations | (748,238) | (1,347,435) |
| PDI/PDVI/PRC/TAC | - | (529,641) |
| Salaries and other personnel costs | (748,238) | (817,794) |
| General materials | (84,875) | (90,365) |
| Treatment materials | (124,069) | (138,538) |
| Services | (662,266) | (643,146) |
| Electrical energy | (385,589) | (386,773) |
| General expenses | (413,324) | (395,588) |
| Municipal participation in the collection | (253,468) | (206,959) |
| São Paulo | (186,569) | (166,018) |
| Other municipalities | (66,899) | (40,941) |
| Water Use | (24,844) | (27,645) |
| Other overhead expenses | (135,012) | (160,984) |
| Tax expenses | (19,281) | (19,315) |
| Depreciation and amortization | (788,206) | (670,772) |
| Estimated losses with doubtful debts | (71,645) | (217,426) |
| Costs, administrative and commercial expenses | (4,540,733) | (5,144,190) |
| Other Operating Income | 14,179 | 58,609 |
| Other Operating Expenses | (7,370) | (8,122) |
| Equity Income Result | 1,296 | 10,047 |
| Result Before Financial Result and Taxes | 2,207,223 | 1,070,881 |
| Financial Result | (453,686) | (14,047) |
| Financial expenses | (686,815) | (482,929) |
| Financial income | 298,259 | 204,401 |
| Exchange gain (loss), net | (65,130) | 264,481 |
| Result Before Taxes on Profit | 1,753,537 | 1,056,834 |
|
Earnings |
|
| Page 16 |
| Income Tax and Social Contribution on Profit | (544,072) | (313,091) |
| Current | (559,538) | (402,699) |
| Deferred | 15,466 | 89,608 |
| Net Income for the period | 1,209,465 | 743,743 |
|
Earnings |
|
| Page 17 |
Holding - Balance Sheet
| Balance Sheet (R$ Thousand) | ||
| ASSETS | 2Q24 | 2Q23 |
| Current assets | ||
| Cash and cash equivalents | 2,809,311 | 1,327,173 |
| Financial investments | 2,339,543 | 929,178 |
| Trade receivables | 3,665,788 | 3,300,714 |
| Related parties and transactions | 245,208 | 219,803 |
| Inventories | 115,869 | 120,614 |
| Restricted cash | 50,638 | 37,873 |
| Currrent recoverable taxes | 306,398 | 244,820 |
| Derivative financial instruments | 93,864 | - |
| Other assets | 134,529 | 82,032 |
| Total current assets | 9,761,148 | 6,262,207 |
| Noncurrent assets | ||
| Trade receivables | 307,661 | 216,758 |
| Related parties and transactions | 925,211 | 951,059 |
| Escrow deposits | 143,063 | 195,530 |
| Deferred income tax and social contribution | 130,751 | - |
| National Water and Basic Sanitation Agency - ANA | 1,908 | 5,138 |
| Other assets | 224,117 | 176,429 |
| Equity investments | 192,726 | 154,907 |
| Investment properties | 46,654 | 46,702 |
| Contract assets | 7,742,774 | 8,674,300 |
| Intangible assets | 44,631,595 | 40,399,382 |
| Property, plant and equipment | 498,436 | 371,209 |
| Total noncurrent assets | 54,844,896 | 51,191,414 |
| TOTAL ASSETS | 64,606,044 | 57,453,621 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Trade payables | 499,630 | 256,679 |
| Borrowings and financing | 2,419,440 | 2,578,954 |
| Accrued payroll and related charges | 581,128 | 900,340 |
| Taxes and contributions | 409,889 | 232,698 |
| Dividends and interest on capital payable | 874 | 709 |
| Provisions | 1,122,553 | 1,019,086 |
| Services payable | 847,120 | 588,456 |
|
Earnings |
|
| Page 18 |
| Public-Private Partnership - PPP | 439,289 | 207,467 |
| Program Contract Commitments | 19,519 | 61,381 |
| Other liabilities | 745,342 | 604,203 |
| Total current liabilities | 7,084,784 | 6,449,973 |
| Noncurrent liabilities | ||
| Borrowings and financing | 19,357,368 | 16,126,235 |
| Deferred income tax and social contribution | - | 101,914 |
| Deferred Cofins and Pasep | 176,353 | 162,591 |
| Provisions | 805,253 | 649,245 |
| Pension obligations | 2,119,211 | 2,135,644 |
| Public-Private Partnership - PPP | 2,786,976 | 2,616,942 |
| Program Contract Commitments | 12,306 | 12,566 |
| Other liabilities | 466,704 | 450,950 |
| Total noncurrent liabilities | 25,724,171 | 22,256,087 |
| Total liabilities | 32,808,955 | 28,706,060 |
| Equity | ||
| Paid-up capital | 15,000,000 | 15,000,000 |
| Profit reserve | 14,617,966 | 12,078,963 |
| Other comprehensive income | 146,362 | 177,643 |
| Retained earnings | 2,032,761 | 1,490,955 |
| Total equity | 31,797,089 | 28,747,561 |
| TOTAL EQUITY AND LIABILITIES | 64,606,044 | 57,453,621 |
|
Earnings |
|
| Page 19 |
Holding - Cash Flow
| Cash Flow (R$ Thousand) | |||
|
Jan-Jun 2024 |
Jan-Jun 2023 |
||
| Profit before income tax and social contribution | 3,076,420 | 2,189,778 | |
| Adjustment for Net income reconciliation: | |||
| Provision and inflation adjustment | 208,048 | 196,776 | |
| Financial charges from customers | (228,916) | (196,290) | |
| Residual value of property, plant and equipment and intangible assets written-off | 2,618 | 5,304 | |
| Depreciation and amortization | 1,560,758 | 1,327,916 | |
| Interest calculated on loans and financing payable | 743,263 | 616,940 | |
| Inflation adjustment and foreign exchange gains (losses) on loans and financing | 286,855 | (238,972) | |
| Derivative financial instruments | (91,617) | - | |
| Interest and inflation adjustment losses | 8,789 | 11,586 | |
| Interest and inflation adjustment gains | (131,699) | (123,034) | |
| Allowance for doubtful accounts | 262,163 | 380,231 | |
| Provision for Consent Decree (TAC) and Separation Incentive Program (PDI) | (246,077) | 529,245 | |
| Equity result | (10,133) | (16,381) | |
| Interest and Monetary Update (Public-Private Partnership) | 281,925 | 245,427 | |
| Other adjustments | 9,551 | 13,816 | |
| Provision from São Paulo agreement | 194,597 | 159,970 | |
| Margin on intangible assets arising from concession | (58,641) | (54,921) | |
| Pension obligations | 97,760 | 103,842 | |
| 5,965,664 | 5,151,233 | ||
| Changes in assets | |||
| Trade accounts receivable | (140,981) | (407,986) | |
| Accounts receivable from related parties | 41,754 | 4,834 | |
| Inventories | (29,916) | 3,633 | |
| Recoverable taxes | 188,247 | (1,914) | |
| Other assets | (69,406) | (36,865) | |
| Escrow deposits | 31,977 | (17,109) | |
| Changes in liabilities | |||
| Trade payables and contractors | (427,320) | (411,979) | |
| Accrued payroll and related charges | (2,985) | 1,847 | |
| Pension obligations | (121,420) | (118,389) | |
| Taxes and contributions payable | (158,644) | (240,857) | |
| Services payable | (96,703) | (294,756) | |
| Other liabilities | (40,225) | (473,658) | |
| Provisions | (106,674) | (139,229) | |
| Deferred Cofins/Pasep | 12,256 | 2,868 | |
| Cash generated from operations | 5,045,624 | 3,021,673 |
|
Earnings |
|
| Page 20 |
| Interest paid | (862,183) | (902,553) | |
| Income tax and contribution paid | (1,019,269) | (606,093) | |
| Net cash generated from operating activities | 3,164,172 | 1,513,027 | |
| Cash flows from investing activities | |||
| Acquisition of contract assets and intangible assets | (1,699,943) | (1,505,652) | |
| Purchases of tangible assets | (36,509) | (40,286) | |
| Restricted cash | 4,306 | (399) | |
| Financial investments | 146,071 | 828,829 | |
| Investment | (16,430) | (6,304) | |
| Net cash used in investing activities | (1,602,505) | (723,812) | |
| Cash flow from financing activities | |||
| Loans and financing | |||
| Proceeds from loans | 3,079,812 | 833,095 | |
| Repayments of loans | (1,394,065) | (917,982) | |
| Payment of interest on shareholders' equity | (928,774) | (823,671) | |
| Public-Private Partnership - PPP | (342,274) | (380,199) | |
| Program Contract Commitments | (3,146) | (40,770) | |
| Paid derivative financial instruments | (2,247) | - | |
| Net cash used in financing activities | 409,306 | (1,329,527) | |
| Increase/(decrease) in cash and cash equivalents | 1,970,973 | (540,312) | |
| Cash and cash equivalents at beginning of the year | 838,338 | 1,867,485 | |
| Cash and cash equivalents at end of the year | 2,809,311 | 1,327,173 | |
| Increase/(decrease) in cash and cash equivalents | 1,970,973 | (540,312) |
|
Earnings |
|
| Page 21 |
Consolidated - Income Statement
| Income Statement (R$ Thousand) | ||
| 2Q24 | 2Q23 | |
| Water Revenue | 3,146,970 | 2,749,015 |
| Sewage Revenue | 2,756,745 | 2,417,527 |
| TRCF | 29,235 | 25,734 |
| Gross Sanitation Services Revenue | 5,932,950 | 5,192,276 |
| Cofins Pasep e TRCF | (457,305) | (300,973) |
| Net Sanitation Services Revenue | 5,475,645 | 4,891,303 |
| Construction Revenue | 1,273,848 | 1,263,234 |
| Net Operating Income | 6,749,493 | 6,154,537 |
| Construction Cost | (1,245,209) | (1,234,832) |
| Salaries, charges and benefits and social security obligations | (748,724) | (1,347,435) |
| PDI/PDVI/PRC/TAC | - | (529,641) |
| Salaries and other personnel costs | (748,724) | (817,794) |
| General materials | (85,274) | (90,365) |
| Treatment materials | (124,260) | (138,538) |
| Services | (663,182) | (643,146) |
| Electrical energy | (387,058) | (386,773) |
| General expenses | (413,523) | (395,588) |
| Municipal participation in the collection | (253,660) | (206,959) |
| São Paulo | (186,569) | (166,018) |
| Other municipalities | (67,091) | (40,941) |
| Water Use | (24,844) | (27,645) |
| Other overhead expenses | (135,019) | (160,984) |
| Tax expenses | (19,295) | (19,315) |
| Depreciation and amortization | (789,439) | (670,772) |
| Estimated losses with doubtful debts | (71,645) | (217,426) |
| Costs, administrative and commercial expenses | (4,547,609) | (5,144,190) |
| Other Operating Income | 14,179 | 58,609 |
| Other Operating Expenses | (7,370) | (8,122) |
| Equity Income Result | 7,915 | 10,047 |
| Result Before Financial Result and Taxes | 2,216,608 | 1,070,881 |
| Financial Result | (461,943) | (14,047) |
| Financial expenses | (692,737) | (482,929) |
| Financial income | 295,924 | 204,401 |
| Exchange gain (loss), net | (65,130) | 264,481 |
| Result Before Taxes on Profit | 1,754,665 | 1,056,834 |
|
Earnings |
|
| Page 22 |
| Income Tax and Social Contribution on Profit | (545,200) | (313,091) |
| Current | (560,666) | (402,699) |
| Deferred | 15,466 | 89,608 |
| Net Income for the period | 1,209,465 | 743,743 |
|
Earnings |
|
| Page 23 |
Consolidated - Balance Sheet
| Balance Sheet (R$ Thousand) | ||
| ASSETS | 2Q24 | 2Q23 |
| Current assets | ||
| Cash and cash equivalents | 2,809,432 | 1,327,173 |
| Financial investments | 2,344,093 | 929,178 |
| Trade receivables | 3,671,287 | 3,300,714 |
| Related parties and transactions | 245,248 | 219,803 |
| Inventories | 116,088 | 120,614 |
| Restricted cash | 50,638 | 37,873 |
| Currrent recoverable taxes | 306,423 | 244,820 |
| Derivative financial instruments | 93,864 | - |
| Other assets | 133,210 | 82,032 |
| Total current assets | 9,770,283 | 6,262,207 |
| Noncurrent assets | ||
| Trade receivables | 307,661 | 216,758 |
| Related parties and transactions | 925,211 | 951,059 |
| Escrow deposits | 143,063 | 195,530 |
| Deferred income tax and social contribution | 130,751 | - |
| National Water and Basic Sanitation Agency - ANA | 1,908 | 5,138 |
| Other assets | 140,595 | 176,429 |
| Equity investments | 192,726 | 154,907 |
| Investment properties | 46,654 | 46,702 |
| Contract assets | 7,745,138 | 8,674,300 |
| Intangible assets | 44,776,717 | 40,399,382 |
| Property, plant and equipment | 498,436 | 371,209 |
| Total noncurrent assets | 54,908,860 | 51,191,414 |
| TOTAL ASSETS | 64,679,143 | 57,453,621 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Trade payables | 497,820 | 256,679 |
| Borrowings and financing | 2,419,440 | 2,578,954 |
| Accrued payroll and related charges | 581,128 | 900,340 |
| Taxes and contributions | 411,159 | 232,698 |
| Dividends and interest on capital payable | 874 | 709 |
| Provisions | 1,122,553 | 1,019,086 |
| Services payable | 850,609 | 588,456 |
|
Earnings |
|
| Page 24 |
| Public-Private Partnership - PPP | 439,289 | 207,467 |
| Program Contract Commitments | 19,519 | 61,381 |
| Other liabilities | 825,231 | 604,203 |
| Total current liabilities | 7,167,622 | 6,449,973 |
| Noncurrent liabilities | ||
| Borrowings and financing | 19,357,368 | 16,126,235 |
| Deferred income tax and social contribution | - | 101,914 |
| Deferred Cofins and Pasep | 176,353 | 162,591 |
| Provisions | 805,253 | 649,245 |
| Pension obligations | 2,119,211 | 2,135,644 |
| Public-Private Partnership - PPP | 2,786,976 | 2,616,942 |
| Program Contract Commitments | 12,306 | 12,566 |
| Other liabilities | 456,965 | 450,950 |
| Total noncurrent liabilities | 25,714,432 | 22,256,087 |
| Total liabilities | 32,882,054 | 28,706,060 |
| Equity | ||
| Paid-up capital | 15,000,000 | 15,000,000 |
| Profit reserve | 14,617,966 | 12,078,963 |
| Other comprehensive income | 146,362 | 177,643 |
| Retained earnings | 2,032,761 | 1,490,955 |
| Total equity | 31,797,089 | 28,747,561 |
| TOTAL EQUITY AND LIABILITIES | 64,679,143 | 57,453,621 |
|
Earnings |
|
| Page 25 |
Consolidated - Cash Flow
| Cash Flow (R$ Thousand) | |||
|
Jan-Jun 2024 |
Jan-Jun 2023 |
||
| Profit before income tax and social contribution | 3,078,526 | 2,189,778 | |
| Adjustment for Net income reconciliation: | |||
| Provision and inflation adjustment | 208,048 | 196,776 | |
| Financial charges from customers | (228,916) | (196,290) | |
| Residual value of property, plant and equipment and intangible assets written-off | 2,618 | 5,304 | |
| Depreciation and amortization | 1,563,225 | 1,327,916 | |
| Interest calculated on loans and financing payable | 743,263 | 616,940 | |
| Inflation adjustment and foreign exchange gains (losses) on loans and financing | 286,855 | (238,972) | |
| Derivative financial instruments | (91,617) | ||
| Interest and inflation adjustment losses | 8,789 | 11,586 | |
| Interest and inflation adjustment gains | (131,832) | (123,034) | |
| Allowance for doubtful accounts | 262,163 | 380,231 | |
| Provision for Consent Decree (TAC) and Separation Incentive Program (PDI) | (246,077) | 529,245 | |
| Equity result | (16,807) | (16,381) | |
| Interest and Monetary Update (Public-Private Partnership) | 281,925 | 245,427 | |
| Other adjustments | 9,551 | 13,816 | |
| Provision from São Paulo agreement | 194,597 | 159,970 | |
| Margin on intangible assets arising from concession | (58,694) | (54,921) | |
| Pension obligations | 97,760 | 103,842 | |
| 5,963,377 | 5,151,233 | ||
| Changes in assets | |||
| Trade accounts receivable | (143,148) | (407,986) | |
| Accounts receivable from related parties | 41,714 | 4,834 | |
| Inventories | (30,080) | 3,633 | |
| Recoverable taxes | 188,224 | (1,914) | |
| Other assets | (63,425) | (36,865) | |
| Escrow deposits | 31,977 | (17,109) | |
| Changes in liabilities | |||
| Trade payables and contractors | (429,281) | (411,979) | |
| Accrued payroll and related charges | (2,985) | 1,847 | |
| Pension obligations | (121,420) | (118,389) | |
| Taxes and contributions payable | (158,635) | (240,857) | |
| Services payable | (94,720) | (294,756) | |
| Other liabilities | (34,335) | (473,658) | |
| Provisions | (106,674) | (139,229) | |
| Deferred Cofins/Pasep | 12,256 | 2,868 | |
| Cash generated from operations | 5,052,845 | 3,021,673 |
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Earnings |
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| Page 26 |
| Interest paid | (862,183) | (902,553) | |
| Income tax and contribution paid | (1,020,618) | (606,093) | |
| Net cash generated from operating activities | 3,170,044 | 1,513,027 | |
| Cash flows from investing activities | |||
| Acquisition of contract assets and intangible assets | (1,702,254) | (1,505,652) | |
| Purchases of tangible assets | (36,509) | (40,286) | |
| Restricted cash | 4,306 | (399) | |
| Financial investments | 142,485 | 828,829 | |
| Investment | (16,430) | (6,304) | |
| Net cash used in investing activities | (1,608,402) | (723,812) | |
| Cash flow from financing activities | |||
| Loans and financing | |||
| Proceeds from loans | 3,079,812 | 833,095 | |
| Repayments of loans | (1,394,065) | (917,982) | |
| Public-Private Partnership - PPP | (928,774) | (823,671) | |
| Program Contract Commitments | (342,274) | (380,199) | |
| Paid derivative financial instruments | (3,146) | (40,770) | |
| Loans and financing | (2,247) | - | |
| Net cash used in financing activities | 409,306 | (1,329,527) | |
| Increase/(decrease) in cash and cash equivalents | 1,970,948 | (540,312) | |
| Cash and cash equivalents at beginning of the year | 838,484 | 1,867,485 | |
| Cash and cash equivalents at end of the year | 2,809,432 | 1,327,173 | |
| Increase/(decrease) in cash and cash equivalents | 1,970,948 | (540,312) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city São Paulo, Brazil.
Date: August 9, 2024
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Companhia de Saneamento Básico do Estado de São Paulo - SABESP
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| By: | /s/ Catia Cristina Teixeira Pereira |
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Name: Catia Cristina Teixeira Pereira
Title: Chief Financial Officer and Investor Relations Officer
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FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.