Companhia de Saneamento do Paraná - SANEPAR (SAPR4) Q2 2025 earnings summary

Executive summary

• Net operating revenue for 2Q25 rose 2.5% year-over-year to BRL 1,705.4 million, driven by tariff adjustments and increased sewage volume and connections.

• Net profit for 2Q25 was BRL 263.8 million, down 29.7% year-over-year, mainly due to higher costs and expenses outpacing revenue growth.

• EBITDA for 2Q25 was BRL 536.0 million, a 16.8% decrease year-over-year, with EBITDA margin dropping to 31.4%.

• Investments reached BRL 1.1 billion in 1H25, up 26% year-over-year, with BRL 612.1 million in Q2 supporting network expansion.

• Default rate remained low at 0.8% in 1H25, reflecting efficient management.

Financial highlights

• 2Q25 net revenue: BRL 1,705.4 million (+2.5% YoY); EBITDA: BRL 536.0 million (-16.8% YoY); net profit: BRL 263.8 million (-29.7% YoY).

• 1H25 net revenue: BRL 3,511 million (+4.4% YoY); EBITDA: BRL 1,652 million (+16.5% YoY); net profit: BRL 1,472 million (+95% YoY).

• EBITDA margin for 1H25 improved to 47.1%; net margin rose to 41.9%.

• Net debt/EBITDA ratio stable at 1.7x as of 1H25.

• Operating cash generation in 2Q25 was BRL 694.7 million, up 16.2% year-over-year.

Outlook and guidance

• Tariff review for 2025–2028 cycle approved, with a 3.7753% correction index and new average tariff of BRL 6.83/m³.

• Ongoing regulatory changes and public consultations may impact future tariff structures and social tariff implementation.

• Management expresses comfort with capital structure and covenant compliance.

• Asset leasing studies for Northern Paraná water supply system underway to support regional expansion.

• No further significant impact expected from the wagon effect in future quarters.