Sabesp Posts Record Profits Following Privatization, 172% Annual Growth

Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) reported exceptional financial results for the fourth quarter and full year of 2024 on Monday.

The Brazilian water utility achieved a net profit of R$1.43 billion ($251 million) in Q4 2024, marking a 21% increase compared to the same period in 2023.

The company’s annual performance proved even more impressive with net income soaring to R$9.58 billion ($1.68 billion) for the full year. This figure represents a 171.9% jump from the R$3.52 billion ($617 million) recorded in 2023.

Sabesp generated R$7.83 billion ($1.37 billion) in net revenue during the fourth quarter, growing 7.9% year-over-year. Total revenue for 2024 reached R$36.1 billion ($6.33 billion), up 41.3% from R$25.5 billion ($4.47 billion) in 2023.

The company’s adjusted EBITDA showed steady growth at R$2.99 billion ($524 million) for Q4, rising 4.1% from the previous year. The full-year adjusted EBITDA totaled R$11.3 billion ($1.98 billion), a 19% increase from 2023.

These strong results follow Sabesp’s privatization in July 2024, which transformed the utility from state-controlled to privately managed. The São Paulo government reduced its ownership stake from 50.3% to 18.3% through the transaction.

Equatorial Group Takes 15% Stake in Sabesp

Equatorial Group acquired a 15% stake for R$6.9 billion ($1.21 billion), becoming the reference shareholder in the process. Financial analysts attribute part of Sabesp’s exceptional performance to its adoption of an asset bifurcation model.

This accounting approach separated intangible and financial assets, boosting gross revenue by R$8.82 billion ($1.55 billion). Strategic tariff adjustments implemented in 2023 and 2024 also contributed to the revenue growth.

Earnings per share climbed substantially to R$14.02 in 2024, compared to R$5.16 in 2023. This reflects the significant profit expansion and creates value for shareholders despite the ownership restructuring.

The company serves approximately 28 million people across 375 municipalities in São Paulo state. Industry experts view these results as validation of the privatization strategy.

The transition has apparently enhanced operational efficiency while maintaining service quality. Sabesp has consistently improved throughout 2024, with each quarter building on previous successes.

The utility plans to increase investments in infrastructure and expand its service coverage. Management expects continued growth as private sector practices drive further operational improvements. The São Paulo government allocated 30% of its privatization proceeds to a fund aimed at reducing consumer tariffs in coming years.

Sabesp’s transformation represents one of Brazil’s most significant privatizations in recent years. The company now stands as Brazil’s first fully privatized, publicly traded sanitation utility.

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