SABESP (SBSP3) Q4 2024 earnings summary

Executive summary

• Net income surged 172% to R$9.6 billion in 2024, driven by operational improvements, cost efficiencies, non-recurring items, and a one-time gain from asset bifurcation.

• Adjusted EBITDA rose 19% to R$11.3 billion, with margin up to 52%, reflecting higher revenue, tariff increases, and cost control.

• Served 28.1 million with water and 25.1 million with sewage in 375 municipalities, advancing universalization and regulatory compliance.

• Completed privatization in July 2024, shifting to dispersed control and signing a new concession contract covering 371 municipalities until 2060.

• Management transition included staff restructuring, IT review, and strategic consulting for future initiatives.

Financial highlights

• Net operating revenue grew 11% to R$23.9 billion; adjusted net revenue from sanitation services up 8.8% to R$21.7 billion.

• EBITDA margin improved to 52%; net profit reached R$9.6 billion, the highest in company history.

• Investments totaled R$6.9 billion in 2024, up 10% year-over-year.

• Operating cash flow increased to R$7.4 billion, up from R$4.9 billion in 2023.

• Distributed R$2.5 billion in dividends and interest on equity, a 159% increase year-over-year.

Outlook and guidance

• Plans to invest R$70 billion by 2029 to achieve universalization targets ahead of schedule.

• 2025 plan prioritizes CapEx execution, regulatory compliance, cost efficiency, and digital transformation.

• New concession contract provides for annual tariff adjustments and regulatory asset base expansion.

• Focus on operational efficiency, loss reduction, and connection of 1 million new units, mainly for sewage.

• Expecting measurable cost savings from zero-based budgeting and operational improvements.