Companhia de Saneamento do Paraná - SANEPAR (SAPR4) Q2 2024 earnings summary

Executive summary

• Net revenue grew 8.4–8.5% in Q2 and 12.5% in 1H24 year-over-year, driven by tariff adjustments and higher water and sewage volumes.

• Net profit declined 11% in Q2 but rose 1.8% in 1H24; EBITDA margin fell to 38.7% in Q2, with 1H24 margin at 42.2%.

• Water and sewage connections increased by 15,000–15,900 and 22,900, respectively, in 1H24; sewage coverage reached 80.5%, water coverage at 100%.

• Recognized for ESG and water management excellence, including Global Water Awards 2024 and top ESG rankings.

• No non-recurring items impacted Q2 results; new Board and CEO appointed in June 2024.

Financial highlights

• Net revenue reached BRL 3.362 billion in 1H24, up 10.5% year-over-year; Q2 net revenue was BRL 1,664.3 million (+8.4% YoY).

• EBITDA was BRL 1.418 billion in 1H24 (+6.9% YoY); Q2 EBITDA was BRL 644.0 million (-2.9% YoY).

• Net profit for 1H24 was BRL 754.9–755 million (+1.8% YoY); Q2 net profit was BRL 375.5–375.6 million (-11% YoY).

• Net debt increased to BRL 4.946–5.15 billion in 1H24; net debt/EBITDA at 1.7x.

• CapEx for 1H24 was BRL 871.3 million, with 56% allocated to sewage and 36–42% to water.

Outlook and guidance

• Tariff adjustment of 2.96% effective from May 2024; 3rd periodic tariff review scheduled for May 2025.

• Targeting BRL 2.3 billion in investments for 2024 and BRL 11.2 billion for 2024–2028.

• Ongoing efforts to accelerate investments and maintain service excellence.

• Expectation of future cost reductions from migration to the free energy market, with projected annual savings of BRL 150 million.

• Management highlights high reservoir levels (99–100%) and continued growth in connections.