Companhia de Saneamento do Paraná - SANEPAR (SAPR4) Q1 2025 earnings summary

Executive summary

• Net profit surged 218.4% year-over-year to BRL 1,208 million in Q1 2025, mainly due to non-recurring Precatórios (IRPJ lawsuit) revenue and operational improvements.

• Net operating revenue grew 6.3% to BRL 1,805.2 million, driven by tariff adjustments, higher billed volumes, and increased connections.

• EBITDA rose 44.1% to BRL 1,115.9 million, with margin expanding to 61.8% (adjusted margin ~45% excluding non-recurring items).

• Administrative reorganization included a voluntary dismissal plan (PDV) with 527 employees, costing BRL 171.6 million and expected to yield a 12-month payback.

• All financial covenants were met, and reservoir levels remained robust.

Financial highlights

• Net revenue reached BRL 1.8 billion (+6.3% YoY); EBITDA: BRL 1,116 million (+44.1% YoY); Net profit: BRL 1,208 million (+218.4% YoY).

• Net margin expanded to 66.9% from 22.3% in 1Q24.

• Operating income increased 50.5% YoY to BRL 964.6 million.

• Cost of energy dropped 25% due to migration to the free market, saving BRL 36-37 million in the quarter.

• Default rate increased to 2.8%, with measures underway to reduce it.

Outlook and guidance

• 3rd Periodic Tariff Review approved, setting average basic tariff at BRL 6.83/m³ for 2025–2028, a 3.7753% correction.

• Continued focus on universalizing sewage services and maintaining 100% water coverage.

• Expectation of improved default rates in coming quarters due to new payment and collection initiatives.

• Ongoing regulatory developments include public consultations on tariff methodologies and social tariff implementation.

• Reservoir levels are stable, supporting operational continuity.