Sao Paulo, Brazil-based
Companhia de Saneamento Basico do Estado de Sao Paulo, or
) financial results for the fourth quarter and full year 2012
were impressive. Earnings per share came in at R$8.39 (US$8.61
per ADR) in 2012, representing an improvement of 56.2% year over
Result, however, was much below the Zacks Consensus Estimate
of US$3.85 per ADR.
Net revenue generated in the year was roughly R$10.8 billion
(US$5.5 billion), up 8.2% year over year, driven by higher water
supply, sewage collection and treatment, and construction
Billed water and sewage volume in 2012 went up 2.7% year over
year to 3,628.3 million cubic meters. Of the total volume
reported, roughly 57.7% represented water variation and about
42.3% came from sewage. The increase in billed water and sewage
volume was due to higher number of connections and acceleration
Water loss rate in 2012 stood at 25.7% versus 25.6% in the
prior year. Water volume produced increased 2.2% year over year;
water connections crept up 2.6% and sewage connections rose
SABESP's cost of sales and services, as a percentage of
revenue, plummeted 60 basis points to 60.1% in 2012. Gross margin
came in at 39.9%. Operating expenses, including selling,
administrative and other expenses declined 7.2% year over year
and represented 13.4% of the total revenue.
EBITDA in the year was around R$3,605.2 million (US$1,848.8
million), up 12.2% year over year with a margin of 33.5%.
Exiting the fourth quarter 2012, SABESP's cash and cash
equivalents stood at R$1,921.2 million (US$937.2 million), up
8.1% from R$1,777.7 million (US$888.9 million) in the previous
quarter. Loans and financing, net of current portion increased
5.9% to R$7,701.9 million (US$3,757.0 million).
SABESP's net cash generated in the year fell 14.0% to
R$2,336.2 million (US$1,139.6 million). Capitals spend on
purchase of property, plant and equipment also declined 78.7% to
R$30.6 million (US$15.7 million).
Following its 2012 earnings announcement, SABESP maintained
its position as one of the largest water and sewage services
provider in the world, serving roughly 7.68 million customers for
water and 6.13 million for sewage.
SABESP currently holds a Zacks Rank #3 (Hold). Other stocks to
watch out for in the industry are
Aqua America Inc.
), with a Zacks Rank #1 (Strong Buy) while
American States Water Company
American Water Works Company, Inc.
), both carry Zacks Rank #2 (Buy).
AMER WATER WORK (AWK): Free Stock Analysis
AMER STATES WTR (AWR): Free Stock Analysis
SABESP -ADR (SBS): Free Stock Analysis Report
AQUA AMER INC (WTR): Free Stock Analysis
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