Sao Paulo, Brazil-based
Companhia de Saneamento Basico do Estado de Sao Paulo, or
net income in the first quarter 2012 increased drastically by 169%
year over year to R$491.9 million (US$277.9 million). Earnings per
share came in at R$2.16 (US$2.44), an increase from R$0.80 (US$0.96
per ADR) in the year-ago quarter. Results exceeded the Zacks
Consensus Estimate of US$1.62.
Net revenue in the first quarter increased 12.8% to R$2,588.4
million (US$1,462.4 million), driven by higher water supply, sewage
collection and treatment, and construction revenue. Results
surpassed the Zacks Consensus Estimate of US$1,357 million.
Billed water and sewage volume in the quarter went up by 3.0%
year over year to 905.5 million cubic meters. Of the total volume
reported, roughly 57.8% represented water variation and about 42.2%
came from sewage. The increase in billed water and sewage volume
was due to higher number of connections and acceleration in
Water loss rate in the first quarter 2012 was at 25.7% versus
26.2% in the year-ago quarter. Water volume produced increased 2.0%
year over year; water connections soared 2.6% and sewage
connections rose by 3.6%.
SABESP's cost of sales and services, as a percentage of revenue,
plummeted to 58.2%, thus improving the gross margin by 1.4%.
Operating expenses, including selling, administrative and other
expenses increased in the quarter settled at 14.4% of total revenue
versus 21.7% in the year-ago comparable quarter.
EBITDA in the quarter was around R$888.6 million (US$502.0
million), up 35.8% year over year with a margin of 34.3%.
Exiting the first quarter 2012, SABESP's cash and cash
equivalents stood at R$2,019.3 million (US$1,109.5 million), down
6.1% sequentially. Loans and financing, net of current portion
increased 4.7% to R$7,295.7 million (US$4,008.6 million).
Net cash flow from operating activities decreased by 16.7% year
over year to R$427.8 million (US$241.7 million). Capital spending
on property, plant and equipment together with intangible assets
were R$19.1 million (US$10.8 million).
Following its first quarter 2012 earnings announcement, SABESP
keeps up its position as the largest water and sewage services
provider in the world, serving roughly 7.5 million customers for
water and 6.0 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 Report
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