SBSP3.SA - Earnings call transcript Q3 2022 | Companhia de Saneamento Básico do Estado de São Paulo

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Operator

Good morning, everyone. And welcome to SABESP's Earnings Call to discuss results relative to Q3 2022. My name is Luiz Roberto Tiberio. I am the Resource Funding and IRO Officer at SABESP. Today with us, Dr. CEO; Company’s the Braga, President Dr. Benedito CFO Garcia, and IRO; Officer. Accounting Miyagui, Marcelo and Osvaldo

over Braga, to remarks, move I Before Dr. to some I’d for give house-keeping instructions. like opening his

being translation already Instructions]. English respective simultaneous available. will for website [Operator company’s available at be presentation press where have We the recording and it’s respective and recorded. into the the IR download The release is

company’s statements to and business are on company’s management we’ll the conference outlook, on recommendations. for have that minutes made like X.X will information Our and are at the the last concerning not to of based for investment journalists. initial company’s assumptions targets during investors end presentation and operating and company. and hours the of for Concluding the remarks approximately They and analysts currently the also Q&A say minutes instructions, XX XX available forward-looking the financial beliefs of part I’d

no turn opening lead make you. to floor results forward will those to Dr. expressed will the may They events over and of that, looking said who are have factors conditions future on that circumstances and to of conditions, Forward-looking performance. in depend Please to Braga his economic materialize. affect statements. to and other the uncertainties or Investors that may the involve and differ Braga, company thus as might in like should I'd refer therefore future these statements industry that guarantee not assumptions they mind Dr. operating numbers risks considerably from remarks. Well, over having

Benedito Braga

the the scenario a also on stored when interest seeing the December. public, the Metropolitan more to carefully São you here systems monitored the to producing of Starting here comfortable following the in who same period we a a comfortable and you for the rains It's have This all. compared and happen total and the be great of this year. sum year, summer year, which are volume earnings Early region Forecast the And of we in normally general at delay your volumes us the to update pleasure our in Thank conference sources all stored situation, drier University, forecast like one drinking are the with the XX%. you was more have of be greet XX%. eight XXXX, investors that of but of journalists with is last for today. Center Paolo water status participating thank water that as is It thank as for of I'd a you to QX with will call. Climate Tiberio. Columbia to by could month the the November due reservoirs

of which our front, that the were business affairs, the In and like in operates, performed the our company's department new expanded we in July terms to the leadership that company XXXX also by unifying results. shareholders. I'd regulation Under the creation of highlight Osvaldo's brought SPEs internal the Dr. of the set in meeting that the department expectations up restructuring have financial area excellent oversight

taking company's or the have X we related sanitation companies the areas of across recently the synergies processes of at to specific the aimed creation disclosed expanding activity, advantage know, entities to of all you market SPEs or also the As purpose activities. and

Defense, with is special and thermal in Council will Valorização for with installed energy Resíduos, a XX of signed waste recovery, share acquire of of adding agreement XX by treatment have a Barueri consumer operate company megawatts megawatts transaction capacity agency. URE-BA, tons Foxx in capacity of de of urban an solid Orizon Administrative pending of solid URE treatment the that subsidiary defense of a a urban XXX,XXX problems, year approval approximately the of that across is purpose mass to at an Economic We already XX% still the and a per waste the incineration sales and world, Brazil, Paulo. country waste China. brings the reduce will be areas has the expensive of so-called Europe, first an from increasingly know, course, shortage burning that, of plant of which generation in and about been us And Japan, here solid urban in power country used in the different more in you areas, to bring specifically which, because expectation the landfills a as São are issues, metropolitan and

on generation on structures, capacity XXXX which our of of four plants X which Katerra one [ph] Jaguari first the up generation. floating set megawatts will the scheduled capital. the reservoir, special be year. energy focused in photovoltaic or system We work on SPE the will We hold in a with construction the SP start SA by is company to purpose Energia operating the next largest the of on and also This XX% of company

also company will greenhouse to And attention our we will add contribution to. close gases. something the Therefore, use our that for ESG energy. we matter are paying the and generation economies increase energy, a We sustainable generation capacity will to pillars, distributed that's further falls photovoltaic reducing within using thus

a use with will the paving allowing setting company in a XXXX, a We investment SP SABESP XX% million asphalt of to of cold recomposition for partnership and hold in in material our objective which [indiscernible] with the formalized up services. SABESP selling plant SA, total R$XX a the producing by have asphalt a stake also

from around. with image. that the pot of say reputation that the and the reminder, of other important faces smaller a by holes view SABESP were made As this way Cities is very of a cities the point problem company

especially asphalt this new work. complex roads of help countryside and terms with very will So expensive this sector, with the logistically for in partnership those rebuilding of the asphalt where private is us in kind significantly

that It reinforce for energy, and for both sustainability activities commitment the in of bylaws ESG. to So as services the those company's and diversification trading third storage, to include maintenance the highlight company, the such for towards our environmental of with are important to participate course, important steps production, planning, operation expansion of and energy possibility parties. systems conservation and is SABESP of

like in residential River we number report the quarter initial to goal approximately further by There are XX%. sewage would collection XXX,XXX Basin. connections the Pinheiros connected XXXX, increased that exceeded I the treatment Finally, the of has to program have third households that of of and the now a result in

you river. specific news, of the he idea, who here fish just that like an This host to resulted a in like say fishing fauna idea X.X numbers. of Porto including everyone, I'd connections And you São and years this X.X or this morning, that to having Alegre have are earlier Pinheiros those the to Brazil, was always consequence of the you SABESP and people to morning, in in which size this River. Just very give give of the the an importance this margins on of hard take city on the a Recife followed cleaner the other opportunity throughout complementing we and in living years, made as size cities of past to Paulo account a was those morning who capital us. have Today, work, on we

you. have in assisted we and further We the improve and also informal mission to of in [indiscernible], operation that's CFO should of basic units the remarks. to three recovery poorest, will sanitation the areas Osvaldo, this for quality start one in excellent [indiscernible] the our metropolitan unit São one the live over quality in numbers had this Paulo us operation Thanks in bringing Piracicaba, who the called area. bring that's of life work unit I Well, as and people opening end conference the Cachoeira quarter. recovery this have units recovery financial accomplished experienced of that of to Antonico, operation rivers, who in assisted what which we now quality turn over by to our I'll neediest month. to

Osvaldo Garcia

conference number And see for compounded. Starting in X, in you to to for volume, Braga. discuss total water a X.X% X.X% increase Good of we for morning, growth sewage and leading QX an thank was Dr. morning, everyone. results. billed participating Slide Good which of with XXXX today's the call X.X%

This in growth are the in that of water is increase impacting sewage recent a the of positively the in above see in with XXXX, in remained our Industrial to in service in billion the from volume XXXX, in water, mix in X, XX, treatment period QX water an in XX.X% net showed category in with been increase readjustment in revenues of billion able variation driven mix XX.X% to investments XX.X% non-residential and revenues On XXXX. stable and May with R$X.X the sewage. will to take a next coming XX.X%, the in QX of in water QX XXXX the R$X.X QX volume from the the which on and of Residential and increased as of R$X.X increased has of in average plan. variation reminder, Commercial services The made were collection improvement line sewage. an in Net in The and be reflection Driving mainly taxes sanitation we expenses. revenues and higher a by water to income period, the in than X.X% growth QX years the Public, in XXX.X% sewage. in The contributed due sewage. X.X% R$XXX in to EBITDA in proportionally growth As category, we to billion Slide from X.X% XX.X% investment R$X.X R$X.X an a to category number tariff slide. expand increase since increase flat X.X% this the XX.X% million place categories. XXXX. billion XXXX billion a by to increased mainly tariff

I of next million, application year compared into the showed grew tariff monetary exchange The R$XXX slide. detail positive from QX mix Costs of of a XXXX. entered net events plus a QX Starting QX the Next U.S. please. sanitation in that's on R$XXX to the -- net and with related a and will valuation to in non-recurring profit equivalent of in about XX.X% July revenues yen, São the XXXX, expenses the taxes lower of of QX the financial XXXX the IPCA Paulo of variation the to due million and The the or linked positive by R$XXX driven dollar of the of fall variations X.XX% to XXXX. the adjustments. go core million, the in saw more into improved the R$XXX XXXX. contribution million, government favorable results. to agreement to numbers result the expenses slide, Income and we mainly the by and increased those social previous with R$XXX tax in state variation XXX.X%, also, compared minus when XX.X%. in full devaluation of effect And exchange of X.XX% a foreign from million

we a R$X.X outcome, net As income an have billion. of

still also relationship Going the from XX.X% increase under construction general for to costs, costs XX.X% Expenses impact excluding adjustment with an the same expenses, contractual consumption. XXXX. effort both have QX XX.X% on security in paving more Expenses to services an activities reinforcing to of materials, Personnel to wages, maintenance rose the compared period in May to due to Annualized slide. improve the channels, the more of salaries, levels. the next billion by respectively, inflation billion increased showed XXXX, retreatment, sewer and spending expenses and in accumulated of expenses water social period. taxes of applied R$X.X increase with increased and last with XX.X% since also year, and would systems by XXXX On moving highlights. on associated and with on R$X.X and reflecting due in inflation both QX and the on benefits, of labor, XX.X%, customer obligations readjustments our prices imply XX.X% following higher delinquency the by

of sector increase Remember expense to of when accounting in that XXXX, an estimates. in this the of there earlier plants were there services from plants The XX%. compared waste, commercial revenue despite QX that stable. among XXXX by tax reached previous the the due with also in which trend of and as with from sewage the in the X.X% XX.X% R$XXX water in The the were actions consumers expansion was [ph] they factors, transportation delinquency the include from of right an treatment reflecting, recovery energy to million, also a in other as continuing in the it quarter, came with reduction million, electric addition, of QX PCLD agencies. delinquency sending or which defaults relation greater terminology also in disconnection million, was the curb cost losses service, reduction of or be will to use called, the the and that QX the Costs mentioned in electricity raised bills, doubtful help this our XXXX overall or consumption That virtual were on XXX overdue increase to to the average service is reduction having rates. tariff, was implemented, conference. to intensification a the R$XX.X actions reduced of In XXXX. the the implemented reduce QX expansion and warnings treatment water and and access burden energy to remained of bills from receivables, end estimated Commercial actions,

an but paying With bills on which come the interest they customers end component pressure family some We have actions, income, those situation country's weighs that prioritizing rates, up economic inflationary over have on intensified and is important you. the to reduction. higher the

please. Next,

the of XXX the XXXX, on about positive agreement recognition July. exchange as financial core improvement to happened see rate Slide driven situation aforementioned of financial of variations variation given mainly in R$XXX a on a São and government Moving in the will the by R$XXX decision, an million Paulo state the R$XXX for and QX million in result of talk monetary from number which with debt. that million monetary expenses in result negative went to XXXX adjustment R$XXX the foreign of we a X million, QX We of

that Just state to an into that by objective value entered Law were paid by the and department company, benefits amendment by been law, XXXX, the when as Alto up given pension government, agreement the and back of XXXX, SABESP were the not In the payment SABESP. state system set of the an to has by obligation to retirement the water the a this agreement, an that whose old third due March agreement dates the the the the which as happened assets XXXX. of reservoir related Tiete as to debt. of which XXXX a the was to agreement from with XXXX part in the reminder, make equate the government. in And entered in was DAEE, an supplementation with reimbursed This company Paulo. state government São An debt covered provisional

not this reservoirs agreement lawsuit, and However, make of by São according saying to bids prevents of XXXX, payment Tiete registration Paulo was definitive SABESP. the the department, this With debt this, those signed region the water SABESP to state to a transfer reservoirs SABESP. sentence the year, correction system it interference reservoirs this July state, payment the in the Alto was credit installments. the in March the to it to was installments transfer of the the base, by and other that of are reservoir SABESP to to transfer on. the words, of will due issued must monetary population. had impediment, agreement part In water XXXX paid, be in possible signed to the principal our no in lawsuit addition to Because amount, whatsoever -- there the reservoirs the being of was DAEE, XX supply in a right. not asset which that Those property an which so of in with due the to replace brought several government, holders third that could In difficulty, SABESP parties and small against the the not of

of saw the this to interest increase in an to due XX.X% due debentures, interest back financial expenses issues. on rates increase XXth recognition of topic, debenture and the XXth mainly to rates the Going the from

tune they currency. backed in reduction on words, create Finally, IDB I'd to other component resources in This the of is and with local were loan R$XXX of the like rate our not which the in R$XXX In foreign highlight exposure, do of XX% point structured from XX%. to from more of reflects rate the one exposure. debt percentage million, million exchange exchange the to blue Invest to currency. IFC the which The amount

are We'll to and I'll Q&A turn session, those back the opening move our So the now floor Tiberio. to on comments.

Luiz Tiberio

Braga. Thank you, Osvaldo. Thank you, Dr.

So we'll start Q&A. the now

address part geared first If have to is questions a moment journalists. then to for answer, The able off-line. investors, later we'll time not analysts limitations, to will and we and some time due we're at

team that. for IR available Our remains

We Carolina have and answer after I'll a the the and one, I'll read question then received to questions you and -- that. tackle those couple read second first you'll of asked then them. actually, we'll questions

Q -Carolina Carneiro

X have is and for the say QX systems questions. I'd a QX of level, that That's doubtful of I'll expect already comment receivables going Dr. to going practices? if to can even we that the a we at Number when and whether Doubtful should I questions read time? reflecting level provisions time. question, the you that on or forward? One to compared in one, at like both dropped that. XXXX. stabilization And see levels a better consider hold a receivables, one new to Braga. Are we normalized

Osvaldo to over it course, turn I'll CFO. our Okay.

Osvaldo Garcia

Okay. in compared closer strict commercial part and system. our QX for driven actions are total did implemented, of second when exchange next doubtful Ladies get in of receivables are that and the level our half that Those being to pre-pandemic are for XXXX. we will to to believe assumed the drop by gentlemen, default discipline they amount levels place year, debt reduce QX our of our levels. and effort, And

good showing been results. correct. were they have You And

we but the numbers half be believe We XXXX, second starting will what period. next see in of year, the to those in close expect pre-pandemic to do had we that some variations,

Carolina Carneiro

the Osvaldo. about is when like you the company. two We'd question And the to last paving comment the What in on share investments an URE-Barueri the of to Carolina in from this level? in behind rationale second moment that M&A you, change are Thank make And the in Carneiro why announced the we investment? the Okay. following. purchase administrations state is

Benedito Braga

some that It's call complemented in When our opened radar view being that. -- solid that as materialize something water I in moment. and to to of our topic, point it is able actually. drinking that also on to only waste not been which it really has tick now. treatment, of focus agenda, related And for This this is in Osvaldo I the earlier, item to reviews. our because bylaws on solid rationale That's the of from the behind is Sanitation and not entails and drainage. also sewage years

with So all the to sense, we are that, of our sense, of makes of the from the finance, for course, number in the private make that that to landfills part And coming sector that advantages with of to combined area. activities. contributing partnership mainstream And there. is your of from has is that the point us identify reduce

of also important reduce on so the everything the that's greenhouse gases forth. and moment environment us ESG, to lines the methane for very this along for So landfills, produced at at so very, coming and from

So in front, partnership. of advantages cold did think the that relation I asphalt I mention to the

my add more it's because the to much something at it financial We of city this in our can on perhaps use side, will country in jump having a terms comments especially help will the into be us, state. really too able of logistics, partnership. the in speaking And side capital technology can course, interesting. to the you and But advantages to of the disposal in entered of have which Osvaldo

Osvaldo Garcia

in cost than expect the expected is we the higher a in the from addition which that coming to also. reduction As asphalt, to returns, regulators,

Cost company's levels excellent want with in the services will of number We a controlled the right? services one, reduction quality we improve costs. provide to and So mantra reduction is costs. at but

execute line working for It -- So no with years to that's It has been worked that. has on X been key for made on in wait us, policies. and is sense company's to now. that the

able where for to first As we we will across same operate. acquire lines, the and explore the we'll that along XXX market cities be the technology URE-Barueri, at

first going good hope this levels Economic and just we So have returns steps, interesting is said. I the studies show as forward. of to return,

additional so that can to XXXX. will we that have expect all contribute for company So meet we the that targets set revenue we

Luiz Tiberio

Okay.

received couple [Operator have Peretti. We another Henrique from Instructions] questions of

Henrique Peretti

one, the So tariff Are from the Henrique Good a Peretti, pre-pandemic consequence, back consumption as Number the and to mix, they two questions. already mix. levels? morning. Osvaldo?

Osvaldo Garcia

place pre-pandemic the has is gap both answer close but Commercial much to than order are small and levels to pandemic. later, behind, resumed close said. Industrial before adjust, quite in to than be in normal still you. this sooner pretty lagging only levels, see bit yes. sector and Yes, periods. Economic be what normalized front. sooner that's the the We Those is Thank what the had Public A should we will as we're mix had I activity a later. in but we

Henrique Peretti

And the about the the for within of the following. revenue Any new news about Thank current is the And you. structure? XXXX? revenue tariff implementation cap

that is this the in fact Our regulating extremely be agency implemented year. next structure interested

Benedito Braga

That's exactly The new -- May this regulating now waiting -- and the Mr. President regulating structure, agency year. from the we agency. are hear to tariff delayed from President, at

that has second part lot revenue this So do question, which this the with this the we will year, cap. -- to to And of happen to with the has expect a XXXX. do

the to it Yes, the do the second The of implemented. part, cap. to company with about vis-à-vis structure is revenue new has the tax implementation be

readjustment to recovered, end offset have in the is key us will XX.X%, XXXX. next in are the to for place. see year this Today, we happen revenues it May our below still We mechanisms until not that protection year, levels. But there be and the if of are happen this cap. have it's we expect in reaching this tariff When below to expected the

Luiz Tiberio

Instructions] your doubt good, you no clear for I room are for There think explanations. Okay. is [Operator the and Thank right, results questions. separately, answers. for

Benedito Braga

observation, a Tiberio. That's nice

job. good You did a

Luiz Tiberio

case, or in We okay? you on if now again, journalists, are for questions to there off-line then, comments other make, it can want move Q&A. Q&A using session this once to do you can the or the Well,

Benedito Braga

All right. on. Carry

Luiz Tiberio

[Operator Instructions] That our concludes Q&A session.

[ph] Dias a question. think I has

[ph]. Dias Okay,

haven't I her. Sorry, seen

Unidentified Analyst

Valor Any to like [indiscernible] this I'd agreements to Newspaper. new in the Economico solid urban year? RSU, from residues. ask happen still about

Benedito Braga

for It's we now. of what about takes of years in XXXX. analysis It Not terms X.X for assessments. have

still have specific year. to sure, do right none no, first will more for And we this also than the more just now. expect than into And one, So is But that for delinquency, be just good what and Tiberio mentioned, this year. reducing having has this the believe year, themselves We speak we're we fighting had nothing next results do already steps. also, action that we have taken costs.

that us of with leaves All excited announced. numbers just all have very the we

Luiz Tiberio

left thanked floor this Yes. remarks, Dias seem Instructions].I back to In has Dr. you I think and Our public, the happy, if your our target numbers case, audience your have will. for audience. [Operator for over right? [ph] you Braga, to our satisfied very turn answer. final

Benedito Braga

-- So Osvaldo. after I'll Osvaldo, talk

Osvaldo Garcia

and employees -- your announcing professionalism, like to thank hard be work. have hard financial team this results. quality of to Miyagui his our announcement, for special A to be for team, So you the this this level able of transparency for worked your and whole and to call to and us thank I'd and who office

So thank straightforward. Mr. this presentation but you, simple Braga. was quite And

Benedito Braga

team, mean, The happy financial results to work. Okay. like Osvaldo, dedicated their are On I forget quite -- I say, And that has my to our white for right? Marcelo. [ph] don't the I names. of really it's forget I'd would hard, end, and hard with anyone, grey Miyagui, and whole my QX. I'll Tiberio, team want couple here complement the a Pacheco worked satisfied we implies on

deliver of. or with company population. of work this deliver. That's to your throughout taken makes So financial well And everyone. is grid, this more I million competence, to results XX When feel the people, been quality and that's period, more and consumers. on also the results, in and connecting the which talked waterfront spells Pinheiros deliver complemented treatment But The serves most important the care city I and And of those more beautiful anymore. life the to to sewage this we collection people. slums, allows SABESP the preserve sewage, emphasize important; to company what -- to the ones and part special, the because environment Not all hard the all good have are I'd are about the and improving is river would life of work That where the doing those households of neediest, the say the now end gentlemen, that and ladies the of started, Today, neediest who who is ones quality clean. and other River the live like benefited of screen right? treated sewage you, in river take the to at people. Basin. to the favelas, the helping and of

leaving us to you Thank serve financial a good financial to of like that's allows meeting numbers, better all, travels a now. I So those good our customers. and good for today. wish ends takeaway Thank I'd those to convey. after performance this you you And And people our are are everyone, from benefiting you. and who

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) 17 Nov 222022 Q3 Earnings call transcript