Good morning, everyone, and welcome to the SABESP's video conference to discuss the Results for the Third Quarter of 2020.
My name is Mario Sampaio.
I am Head of Capital Market and Investor Relations.
Let's start by informing all participants that this video conference is being recorded.
The presentation accompanied by slides is being transmitted over the Internet through the website, www.sabesp.com.br and through the MZiQ platform.
for results the release. available well portal be the as will download same on as Presentation
platform. We be speakers videocast accepted you to remind that the only the through questions will the
and Our XX XX conference potential answers from and analysts questions approximately will X minutes minutes, we will take and reserve and journalists. from hour
But beliefs risks, resumption Well, the Financial those economic caution may would prospects, sectors affect activity to clarify phase. during the that we and and have in Marcelo results Investor make Company are from Investors such course, relating Today, to pandemic assumptions Chief and period. statements. economic us, projections conference economic Relations we in I to not have goals and Mr. involve performance. this some [Louis general Mr. crisis to operational like and the the imposes reopening In with in and through. in occur. the the may factors statement and financial Controller; we on company observed conditions, Costs that Mr. the proceeding, crisis refer Head other we understand Future the before Tariffs. to materially guarantees Affonso, with operating a not or management in as that Officer; of they Before business future therefore, SABESP's the challenges that any a the like forward-looking industry we initial Mr. field, of on quarter, to may -- and company's They Miyagui, of start, some should and Rui and events Pacheco, considerations of of Accounting company the for this lead performance with Accounting; conditions differ considerations general assumptions circumstances expressed and Agnaldo uncertainties go Head made Tiberio], presentation still as may the currently information as of be the constitute depend that well results company. future that may available
However, mix the that directed consequence in the pace in in have to and a from revenues due the consumption recovery is volumes to residential than company's impact as with has But still very a the the leading reflected at total on and increase higher. tariff. all tariffs slower in and average industrial change results reduction category in a in, desirable. in timid commercial average a reduction the of volumes the the This been
We had In to this, year recently we addition October delinquency higher water that March. to also levels. from started went our
So remember year, that let [indiscernible] last year how went me went.
in at water severe debenture measures crisis, terms R$X,XXX,XXX,XXX to that third in and a levels issuances issued amount metro adds billion, the so of starting increase of XXth liquidity all the rainfall that investments efficient, risk are of total resources, we context exposure. those capacity the next Paulo. the rainfall of the in starts to last eliminating now shortages the out slide, few we to been quarter, water in during Sao of of of we events. important of crisis I -- and more that Considering From taken the during have expected have economic of R$X.X financial were effects to point In despite return the October, a in water and the in expected resources company's the is drop is series works aimed the that experiencing exchange of the level the region In this season highlight rate the view, months. comfortable in especially today, far exchange carried mitigating a uncertainty proven volatility, debenture period crisis and higher noticed this the to added be years, few we these strong year. that temperature. water a water have which strengthening more as the of It water then the maintained health to and
representing movements, the foreign debt had remember, from We currency combine this currency dollar, that when changed we also $XXX currency Eurobond approximately high devaluation real foreign an this the XX% and R$X.X of prepaid to situation two we a thus exchanged the factor. the meantime, exposure late If this increasing million against financial May year, of company's last reversing resilience would of mid-December. to expense to we debt due to loan the let's $XXX dollar mature these on increased from foreign adverse it year, the IDB million this reduced we year the In at to XX% billion. reals, already of
that this the million. of using expected from stand of We our million loan in the liquidity BNDES notes this private of interest year. payments still preserved R$X.X insurance and Also, were so the month, ensuring avoid postponement the is we actions and IDB with IDB Invest, area this during Invest bank investment R$XXX cash payment cash is resulted we group, financing the of also signed maturing billion the in amount of a of amount IDB of the far obtained year, total R$XXX in capacity, to agreement in the fact, in by These that maintenance execution R$XXX million. guarantees, operational the that outflows, -- a
billion. In third fact, quarter, had and invested R$X in in months, nine we the the R$X.X already billion we
move We the since participated and SABESP to the compensatory with is we in to in adjustment future. from tariff participate of to to the other rendering stake the bidding of a adjustment sanitation of show effect opportunities This X.XXXX taking adjustment approval we application of which, window the region the framework August quarter a of the also the that in offset service minority the arose effect of the With in X.XX% after was expand a in April, and resulting this sector. competition the the had partly is new the by that process plus prepared being advantage in [Masela], X.XXX% of This postponement consortium in with the private revenues total during to then regulation, partner. competitions a -- Metropolitan in for on due since also that regards marked of adjustment August, last period. in X% had the effect adverse the XX, markets of
Okay.
to Let's slides. now go the
start X. Let's Slide on
Okay.
retail while in residential, from categories, Similar for anchored categories and X% volume water see XX.X%. of the increase Here, which with we was total total X.X% sewage, can segment of in the build in and Maua/Santo a X.X%. Andre the was quarter, X% the the volume increasing favela previous and increase category, consumption social quarter, by by X%, household to residential fell growth non-residential the was excluding
to move X. now Slide Let's
quarter by negative our highlights. revenue to third in the million to R$XXX.X the to impact to debt, resulted decrease period. the our by which Added was signing R$XXX the XXXX especially 'XX. third a of to through change effect financial a in in same R$X.X of of on to million. -- municipality Santo with period. variation billion category Net signed go totaled accounting reduction residential R$X.X the recognized agreement agreement the tariffs municipality with R$X.X the period this in period third in in quarter the of revenue construction to as of billion of is contributing by mentioned, the the quarter exposure, the on of billion from IDB 'XX quarter, for Costs, R$XXX And percentage, This in caused arising greater XX.X% with third close in third compared reduce this nonrecurring operating reduction already Andre quarter 'XX Andre in with contributing in the to the costs positive to due in by effects efforts due the result last period, of the the debt from foreign Santo offset this third by mix the expenses R$XXX million. the with billion variation negative the of margin. 'XX. Income with in fell then increased the selling was and the a quarter a the -- the we Here, administrative compared costs quarter resulting of The lower exact exchange of This currency agreement result the for XX% -- then operating was in effect to tariff R$X.X year. million exchange the the of
the in increase margin billion to R$X from construction in XX-month market affected, R$X.X fell by quarter. was third 'XX to XX.X% adjusted Consequently, XX.X% XX%. R$X.X XXXX. falling this significantly was On a the basis, The was costs, EBITDA XX.X%. quarter adjusted billion EBITDA from billion Excluding
margin XX% the the margin the from XXXX to costs, to the the is month in and third deterioration quarter. condition In Excluding the quarter third of the construction margin XX.X% the adjusted in the effects 'XX, due revenue added events summary, EBITDA of this quarter last XX% period. XX in of to EBITDA nonrecurring 'XX drop was and compared was quarter the third for of economic of of the
of quarter analyze R$XXX to in third million to or from expenses XX.X%. R$X due R$XXX the assets, R$XXX mean, million same investments. administrative increased cost to billion increased to and Compared construction in X compared costs I Slide by construction the costs. 'XX, to now Construction costs, go Let's investments million quarter selling more to
and construction a the payroll costs, mainly variations charges million. amount of R$XXX liabilities to excluding in XX% billion, expenses to of from the 'XX are to million. expenses by R$XXX back quarter R$X.X of due cost variation XX.X%, most the However, million reversal pension the significant billion the of R$X.X variation program in retiring and of planning Among salaries, of and third of or benefits R$XXX related negative the increased
termination worsened compared significantly is quarter, of on The economic Excluding mainly by have X.X% Santo the the the PCR. contributed reduction by to by municipality This the employee in with the program effect, also instability to this million an number of loss from same in the retention agreement employees, the of knowledge R$XXX.X explained COVID-XX level explained the estimated of of would and caused the the for also allowance year. in R$XX.X expenses of when in reversal we in mostly crisis. the default André amount under last third the nonrecurring period increase due the was of variation doubtful call partly gradual the million decreased by to quarter average personnel accounts
move now Slide Let's to X.
positive and R$XXX operating we R$XXX a Here, briefly variation including previously changes by net construction noting expenses, R$XXX to to mainly the that Net negative and explained, more result. the results, financial fell by in management R$XXX including Other as million revenue which Cost the equity was revenues million. of million. income million, net worth decreased once company's came operating costs, exposure. main It's the million. to our expenses, had analyze due reduce will affected R$XX.X FX that grew results, by
income fell the in last period Finally, and tax social to year. compared by lower view of taxable same million the quarter income when recorded the in contribution R$XXX
go So to let's slide, now Slide the next X.
briefly our over top year these year. 'XX, call, over third indicators, gross additional million, quarter manner -- X.X% the growth left. per of comment and cubic a which we've see increase, the year can of expenses the of R$XXX quarter line the been average growing was we'll although our budget in has this third of expenses decrease, third we the third you with billed adjustments lower per XX.X% the compatible sorry, on first performance in in over quarter did increased and third indicator with meter second by as in last in the made operations. revenue quarter indicator 'XX, on this Here controlled by meter This increased an the reporting quarter on R$XXX management Operating XX.X% a million. monthly build executed another comment cubic In quarter quarter
on third the As lower quarter of year you in than quarter evolution as XX.X% the XXXX third had the to top a results can right. consequence, of being compared 'XX, beginning despite the see a positive
you we cash see for our indicator also evolution levels adverse reduce EBITDA can scenario, On cubic offset maintain This growth trend meter. that neglecting billed without the lower the illustrates period. tariffs has the expenses, despite and a in the to generation investment plan. managed bottom, of average average That the
on the talk regulation Let's now about next quickly slide.
Okay.
be revenues. conclusion the within with the of April that PX let's so still to 'XX will criteria are is calculation average scheduled And about preliminary delivered XXXX. for and is keep losses. of an a be currently the some agenda. 'XX hearings review, we tariff scope this talk sharing another report consultation eye, the base on the still It metrics. business for base let's for still such review regulatory public alternative January, to our the in there third until ordinary detailing working on of for regulatory ARSESP. completion agenda, ARSESP important as topics the tariff steps regarding We will basically asset of the conservation that have We worth the tariffs, in public and contributed excluded the review process released. have addresses First, asset of for already the water plan the remembering assets on other the resources made first been risk And by of the The program and
shortly. the required working will on be one. allowed today. it's within is study analysis, The new of be exclusions that from expected tariffs will to made asset we per may tariff to different the important concluded that that we'll Thus, structure by that tariff future the distributed category at means structure revenue our note March current first the base differ XX, there be revision may we're Regarding have structure, in the be which review, but present this and the the tariff the
be to a there's So going distribution. new
Let's now X. move to Slide
the comment expected Let's Paulo. the reservoirs metro the in received average a XX% that Tiete received a while detail XX%. bit on Guarapiranga rainfall. volume had lower of system the little São September the of than XX% system, water Alto in of and The region Cantareira season more and water The 'XX/'XX ended situation then
the Next been X the Tiete of supply slide. average to inflows has main With Alto inflows its minimum close below levels. systems, recording historic
low. As you can went very see, they
XX the the the next the Considering system entire October go integrated system's was volume region for for water Paulo, XX.X%. Let's available to total of metro slide. São
water X% it that October April can between is the was the is season normal between 'XX, and September rain same this XXXX. March. of the lower reservoir month as than higher, drop Although from volume period you see, in in noting worth It's the as levels concentrates to
purpose, during São less observe metro water obviously, supply control. then region Spike the the out, supply less. can as rain the to water and reservoirs under of the this The -- April system's that saw, shortage Interconnection expected, of for September São the network works So increased we when the and the rainfall system Jaguari-Atibainha that Paulo storage, water than falls stress. of Paulo is of following the carried and water the -- security we sorry, guarantee the from as water construction the that lower we such during Lourenço availability production São of periods period sources
slide. Let's -- next
industrial metro commercial and noting significant maintaining maintaining crisis practically production, population consumption. same worth it's with change an already a the residential income impacts plants, our increase the the the difficulty] see renewable the in and in volume graph, year. second São beginning production trend the many solar a point by fact, of the produced. Paulo plants. XX onetime average in disbursed this was in And October drop, consequently, mentioned, combined of although that and the in brought And consumption of [Technical a the region difficulty] economic in epidemic, Finally, in of amount you of in [Technical plants as plant pattern the families, average of with -- energy s the -- are can
a with multilateral is And no lending It refinancing. this to investments in and very a cash associating So guarantees. and move. support lending emblematic to is reals,
relevant to and funds capacity preserve our So very simultaneously end, important. this such the CapEx further liquidity. support our will is t and be execution
have now questions. the for basically open for what slides. that's we We're So
