Companhia de Saneamento do Paraná - SANEPAR (SAPR4) Q3 2024 earnings summary

Executive summary

• Net revenue increased 6.5% year-over-year in Q3 2024 and 10.4% for the nine-month period, driven by tariff adjustments, higher billed volumes, and expanded connections.

• Net profit declined 4.9% in Q3 2024 and 0.5% for the nine-month period, mainly due to a 15.1% rise in operating costs and expenses.

• EBITDA margin fell to 44.4% in Q3 2024 from 48.4% in Q3 2023; for the nine months, margin was 42.9%, down from 45.8%.

• Service coverage reached 100% for water and 80.8% for sewage, with over 25,000 new water and 36,500 new sewage connections.

• Recognized with the ANEFAC Transparency Award, Southern Region's Innovation Champions Award, and other accolades for transparency and climate-smart practices.

Financial highlights

• Q3 2024 net revenue was BRL 1,709.7 million (+6.5% YoY); 9M24: BRL 5,072.0 million (+10.4% YoY).

• Q3 2024 net profit was BRL 377.5 million (-4.9% YoY); 9M24: BRL 1,132.5 million (-0.5% YoY).

• Q3 2024 EBITDA was BRL 758.5 million (-2.5% YoY); margin at 44.4%.

• Operating costs and expenses increased 15.1% in Q3 2024 and 15.1% in 9M24, mainly due to higher personnel and third-party services.

• Cash flow from operations grew 19.1% in the nine-month period, with a strong EBITDA-to-cash conversion rate of 94.7%.

Outlook and guidance

• Tariff adjustment of 2.96% effective from May 2024, with new regulatory methodology in place and a periodic tariff review scheduled for completion by May 2025.

• Legal and labor provisions are expected to normalize as major lawsuits conclude by the end of 2024 and into 2025.

• Ongoing strategic planning may adjust dividend payment periodicity, depending on financial conditions.

• Focus on universalization, service quality, and operational efficiency in a competitive market.

• Forward-looking statements highlight dependence on market conditions, regulatory changes, and access to capital.