Business
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Q1 Earnings Call Highlights
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Q1 Earnings Call Highlights
About this update from Companhia De Saneamento Basico Do Estado De Sao Paulo Sabesp
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp NYSE:SBS reported higher first-quarter 2026 revenue, EBITDA and net income, while management said the company continued to accelerate investments tied to its universal access commitments and operational transformation.Chief Financial Officer Daniel Szlak said adjusted net revenue rose 11% year over year to BRL 6 billion. Adjusted EBITDA increased 26% to BRL 3.8 billion, with margin expanding to 62.9%, while adjusted net income climbed 32% to BRL 1.5 billion. Reported net income was BRL 1.7 billion, up from BRL 1.5 billion a year earlier.Szlak said the figures presented were for SABESP only and did not include MI’s figures, noting that for the quarter the company had consolidated only the balance sheet.Revenue Lifted by Tariffs and Commercial InitiativesManagement attributed the 11% increase in adjusted net revenue to pricing, volume and mix effects. Szlak said price contributed 12%, reflecting the latest tariff increase implemented in January, including a 9.1% phase-in from last year’s bills invoiced in 2026, as well as an additional 2.8% gain from commercial initiatives, particularly the termination of large-client contracts.Volume contributed 2.4%, with customer-base expansion partly offset by lower consumption per capita due to weather effects. Mix reduced revenue by 3.4%, reflecting the expansion of subsidized tariff programs.Subsidized tariffs now cover more than 2 million connections, up 23% year over year. Szlak said the programs are aligned with SABESP’s social mandate and are covered within the regulatory framework.Water production totaled 778 million cubic meters in the quarter, down 4.6% from the year-earlier period. Szlak said the decline reflected a milder summer, with average temperatures 3.3 degrees Celsius lower than last year, as well as night pressure management implemented for about 10 hours per day under SP Águas’ operational rule to improve system resilience.Costs Decline as Efficiency Measures Take HoldSABESP said adjusted EBITDA growth was supported by higher revenue and cost discipline. Szlak cited gains in general and administrative expenses, including a BRL 30 million past-due settlement with one of the cities served by the company, and lower power expenses as the free market accounted for 86% of total consumption.Personnel costs declined 26% year over year, reflectin...