Sao Paulo, Brazil-based
Companhia de Saneamento Basico do Estado de Sao Paulo, or
) reported an increase of 31.3% in its net earnings as compared
with the year-ago quarter. Earnings per share were R$0.69 (or 30
cents per ADR) in the quarter, up 30.2% year over year.
SABESP generated roughly R$2,772.4 million (US$1,216.0
million) in net revenue in the quarter, up 2.3% year over year.
It was driven by demand for higher water supply, sewage
collection and treatment.
Billed water and sewage volume in the third quarter 2013 went
up 2.0% year over year to 925.0 million cubic meters. Of the
total volume reported, roughly 57.6% represented water variation
and about 42.4% came from sewage. The increase in billed water
and sewage volume was due to higher number of connections and
acceleration in consumption.
Water loss rate was at 25.0% versus 25.8% in the prior year
quarter. Water volume produced decreased 0.5% year over year;
water connections crept up 2.7% and sewage connections rose
SABESP's cost of sales in the quarter increased 3.1%
year-over-year and represented 59.2% of total revenue versus
58.7% in the year-ago quarter. Gross margin was at 40.8%.
Operating expenses, including selling and administrative,
decreased 24.7% year-over-year and represented 10.8% of the total
Adjusted EBITDA in the quarter was around R$1,041.9 million
(US$457.0 million), up 15.5% year over year with a margin of
Exiting the third quarter 2013, SABESP had cash and cash
equivalents balance of approximately R$1,828.8 million (US$820.1
million), up from R$1,669.1 million (US$748.5 million) in the
previous quarter. Loans and financing increased 1.4% sequentially
to R$8,379.2 million (US$3,757.5 million).
SABESP's net cash generated in the quarter increased 34.8% to
R$753.1 million (US$330.3 million). Capitals spent on purchase of
property, plant and equipment increased 16.3% to R$3.6 million
Following its third quarter 2013 earnings announcement, SABESP
maintained its position as one of the largest water and sewage
services providers in the world, serving roughly 24.5 million
customers for water and 21.3 million for sewage.
SABESP currently holds a Zacks Rank #5 (Strong Sell). Other
companies to watch out for in the industry are
Middlesex Water Co.
), with a Zacks Rank #1 (Strong Buy)., Two others -
American Water Works Company, Inc.
California Water Service Group
), each carry a Zacks Rank #2 (Buy).
AMER WATER WORK (AWK): Free Stock Analysis
CALIF WATER SVC (CWT): Free Stock Analysis
MIDDLESEX WATER (MSEX): Free Stock Analysis
SABESP -ADR (SBS): Free Stock Analysis Report
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