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

Executive summary

• Net income for 2Q25 was BRL 263.8 million, down 29.7% year-over-year, mainly due to higher costs and expenses outpacing revenue growth, while 1H25 net income surged 95% to BRL 1.47 billion, driven by a large judicial tax credit.

• Net revenue grew 2.5% in 2Q25 year-over-year to BRL 1.705 billion, with 1H25 net revenue up 4.4% to BRL 3.511 billion, supported by tariff adjustments and increased sewage volumes.

• EBITDA for 2Q25 was BRL 536 million (margin 31.4%), down from 38.7% in 2Q24, while 1H25 EBITDA rose 16.5% to BRL 1.652 billion.

• Investments reached BRL 1.1 billion in 1H25, up 26% year-over-year, with BRL 612 million in Q2, focused on water and sewage infrastructure.

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

Financial highlights

• Net revenue in 2Q25 was BRL 1.705 billion (+2.5% YoY); 1H25 net revenue was BRL 3.511 billion (+4.4% YoY).

• EBITDA for 2Q25 was BRL 536 million (margin 31.4%, -7.3 p.p. YoY); 1H25 EBITDA was BRL 1.652 billion (+16.5% YoY, margin 47.1%).

• Net profit for 2Q25 was BRL 263.8 million (-29.7% YoY); 1H25 net profit was BRL 1.472 billion (+95% YoY), mainly due to non-recurring judicial tax credits.

• Operating cash generation in 1H25 was strong, up 15.8% to BRL 1.428 billion, with 83% conversion.

• Default rate at 0.8%, improved from 1.1% in the prior year.

Outlook and guidance

• Tariff adjustments of 3.7753% (May 2025) and 2.9577% (May 2024) are expected to support future revenue.

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

• Investment plan for 2025–2029 totals BRL 11.8 billion, with leverage expected to remain comfortably below the 3x contractual limit.

• Ongoing regulatory reviews and the implementation of a national social tariff may impact future pricing and margins.

• New business initiatives under development, with seven strategic theses to be disclosed soon.