Neoenergia, Equatorial, and Sabesp: Brazil’s Utilities Face Different Fortunes in Q3 2025

Brazil’s three largest utility companies released third-quarter 2025 results that tell starkly different stories.

Neoenergia and Equatorial, both electricity distributors, showed solid growth and operational gains. Sabesp, the newly privatized water company, posted strong profits while facing the worst drought in a decade.

Neoenergia: Tariff Increases Drive Profit Growth

Neoenergia earned net profit of R$ 924 million ($162 million) in the third quarter, up 10% from last year. The Spanish-controlled company distributes electricity to 17 million customers across five Brazilian states.

Net revenue climbed 10% to R$ 12.97 billion ($2.3 billion) during the quarter. This growth came primarily from approved tariff increases across all distribution units. EBITDA grew 14% to R$ 3.39 billion ($594 million), showing strong cost control.

Net debt reached R$ 47.18 billion ($8.3 billion) by September, climbing 9% since December. Management attributed the increase to tariff assets from government subsidies that should reverse during 2026 rate reviews.

Investment spending remained strong. Neoenergia deployed R$ 7.6 billion ($1.3 billion) in the first nine months, with R$ 4.8 billion ($842 million) directed to distribution networks.

Equatorial: Volume Growth Meets Loss Reduction

Equatorial reported third-quarter energy injected growth of 3.1% to 18,328 GWh. The company serves 14.5 million customers through seven distribution licenses.

The standout achievement was loss reduction. Total system losses dropped to 17.4%, a full percentage point below regulatory limits. Distributed energy advanced 3.3% to 15,007 GWh.

In April 2025, Equatorial sold its transmission assets to CDPQ for R$ 9.37 billion ($1.6 billion). The company bought a 15% stake in Sabesp for R$ 6.9 billion ($1.2 billion) in July 2024.

Sabesp: Strong Profits Clash With Water Crisis

Sabesp’s second-quarter net profit reached R$ 2.14 billion ($375 million), soaring 76.6% after July 2024 privatization. EBITDA hit R$ 3.62 billion ($635 million), jumping 21.5%.

But a water crisis looms. Average extraction through August reached 72 cubic meters per second, exceeding pre-2014 crisis levels. The critical Cantareira System dropped below 30% capacity by October, triggering emergency restrictions.

Regulators cut extraction limits from 27 to 23 cubic meters per second starting October 1. Under dry scenarios, the system could crash to 17% by March 2026, potentially forcing rationing like the 2014 crisis.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.