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

Executive summary

• Net revenue grew 8.5% in Q2 and 12.5% in the first half of 2024 year-over-year, with net profit up 1.8% in 1H24 but down 11% in Q2 compared to the same quarter last year.

• EBITDA decreased 2.9% in Q2 but increased 6.9% in the first half; net margin dropped 11% in Q2 but rose 1.8% in the first half, compared to 2023.

• Achieved 15,900 new water and 22,900 new sewage connections in the first half; sewage service coverage reached 80.5%, with 100% of collected sewage treated.

• Recognized for ESG and water management excellence, including Global Water Awards 2024 and top ESG ranking in ISE B3 23/24.

Financial highlights

• Net revenue reached BRL 3.362 billion in the first half, up 10.5% year-over-year; Q2 net revenue was BRL 1,664.3 million, up 8.4% YoY.

• EBITDA was BRL 1.418 billion in 1H24, up 6.9%; net profit was BRL 755 million, up 1.8% in 1H24 but down 11% in Q2.

• Cash generation increased 20.3% to BRL 1.233 billion, with an 87% conversion rate; operating cash generation in Q2 was BRL 597.8 million (+10.1% YoY).

• Net debt rose to BRL 5.15 billion in 1H24, with net debt/EBITDA at 1.7x.

• CapEx reached BRL 871 million in 1H24, nearly flat year-over-year; Q2 CapEx was BRL 446.7 million, down 6.5% YoY.

Outlook and guidance

• 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.

• Price revision process for 2025 underway, with focus on fair and balanced tariffs; 2.9577% tariff adjustment approved for 2024.