Sao Paulo, Brazil-based
Companhia de Saneamento Basico do Estado de Sao Paulo, or
) results in the third quarter 2012 were impressive compared with
the year-ago quarter as earnings per share came in at R$1.59 or
US$1.59 per ADR as compared with the year-ago earnings of R$0.30
per share or US$0.37 per ADR. The results were, however, below
the Zacks Consensus Estimate of US$2.13 per ADR.
Net income of the water and sewage service provider was
roughly R$361.8 million (US$180.9 million) compared with R$68.0
million (US$41.7 million) in the year-ago quarter.
Net revenue in the third quarter increased 4.5% to R$2,710.7
million (US$1,355.4 million), driven by higher water supply,
sewage collection and treatment, and construction revenue.
Results, however, failed to surpass the Zacks Consensus Estimate
of US$1,374 million.
Billed water and sewage volume in the quarter went up by 3.2%
year over year to 907.2 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
Water loss rate in the third quarter 2012 was at 25.8% versus
25.7% in the year-ago quarter. Water volume produced increased
2.0% year over year; water connections soared 2.5% and sewage
connections rose by 3.3%.
SABESP's cost of sales and services, as a percentage of
revenue, plummeted 440 basis points to 58.7% in the quarter.
Gross margin came in at 41.3%. Operating expenses, including
selling, administrative and other expenses in the quarter jumped
5 percentage points in the quarter to 16.8% of total revenue.
EBITDA in the quarter was around R$901.8 million (US$450.9
million), up 10.6% year over year with a margin of 33.3%.
Exiting the third quarter 2012, SABESP's cash and cash
equivalents stood at R$1,777.7 million (US$888.9 million), up
1.4% from R$1,752.5 million (US$842.5 million) in the previous
quarter. Loans and financing, net of current portion increased
0.3% to R$7,269.6 million (US$3,634.8 million).
Net cash flow from operating activities fell by 3.6% year over
year to R$565.1 million (US$282.6 million). Capital spending on
property, plant and equipment together with intangible assets
declined 16.7% year over year to R$495.3 million (US$247.7
Following its third quarter 2012 earnings announcement, SABESP
keeps up its position as the largest water and sewage services
provider in the world, serving roughly 7.63 million customers for
water and 6.07 million for sewage.
The company faces stiff competition from
Veolia Environnement S.A.
), a privately held Thames Water Holdings plc, and GDF Suez
SABESP -ADR (SBS): Free Stock Analysis Report
VEOLIA ENVIRON (VE): Free Stock Analysis
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