sbspr2q17_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For August, 2017
(Commission File No. 1-31317)
 

 
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
(Exact name of registrant as specified in its charter)
 
Basic Sanitation Company of the State of Sao Paulo - SABESP
(Translation of Registrant's name into English)
 


Rua Costa Carvalho, 300
São Paulo, S.P., 05429-900
Federative Republic of Brazil
(Address of Registrant's principal executive offices)



Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7)__.

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):

 
 

 

SABESP announces 2Q17 results

São Paulo, August 14, 2017 - Companhia de Saneamento Básico do Estado de São Paulo - SABESP (B3: SBSP3; NYSE: SBS), one of the largest water and sewage services providers in the world based on the number of costumers, announces today its 2Q17 results. The Company’s operating and financial information, except when indicated otherwise is presented in Brazilian Reais, in accordance with the Brazilian Corporate Law. All comparisons in this release, unless otherwise stated, refer to the same period of 2016.

 

 

  

SBSP3: R$ 32.24/share
SBS: US$ 10.06 (ADR=1 share)
Total shares: 683,509,869
Market value: R$ 22.0 billion
Closing quote: 08/14/2017

 

 

 

 

 

 

 

Page 1 of 11


 
 

 

1.    Financial highlights

                 

R$ million

 

 

2Q17

2Q16

Chg. (R$)

%

1H17

1H16

Chg. (R$)

%

 

Gross operating revenue

2,901.6

2,723.4

178.2

6.5

5,930.9

5,294.1

636.8

12.0

 

Construction revenue

779.4

897.2

(117.8)

(13.1)

1,502.4

1,522.4

(20.0)

(1.3)

 

COFINS and PASEP taxes

(186.4)

(182.0)

(4.4)

2.4

(379.8)

(350.1)

(29.7)

8.5

(=)

Net operating revenue

3,494.6

3,438.6

56.0

1.6

7,053.5

6,466.4

587.1

9.1

 

Costs and expenses

(1,984.6)

(1,738.0)

(246.6)

14.2

(3,816.6)

(3,532.3)

(284.3)

8.0

 

Construction costs

(764.2)

(877.4)

113.2

(12.9)

(1,471.4)

(1,489.8)

18.4

(1.2)

 

Equity result

1.6

(0.3)

1.9

(633.3)

3.5

1.8

1.7

94.4

 

Other operating revenue (expenses), net

12.5

16.2

(3.7)

(22.8)

23.0

21.6

1.4

6.5

(=)

Earnings before financial result, income tax and social contribution

759.9

839.1

(79.2)

(9.4)

1,792.0

1,467.7

324.3

22.1

 

Financial result

(281.2)

372.7

(653.9)

(175.4)

(277.4)

712.9

(990.3)

(138.9)

(=)

Earnings before income tax and social contribution

478.7

1,211.8

(733.1)

(60.5)

1,514.6

2,180.6

(666.0)

(30.5)

 

Income tax and social contribution

(146.9)

(414.3)

267.4

(64.5)

(508.4)

(754.3)

245.9

(32.6)

(=)

Net income

331.8

797.5

(465.7)

(58.4)

1,006.2

1,426.3

(420.1)

(29.5)

 

Earnings per share* (R$)

0.49

1.17

 

 

1.47

2.09

 

 

* Total shares = 683,509,869

               

 

 

Adjusted EBITDA Reconciliation (Non-accounting measures)

                 

R$ million

 

 

2Q17

2Q16

Chg. (R$)

%

1H17

1H16

Chg. (R$)

%

 

Net income

331.8

797.5

(465.7)

(58.4)

1,006.2

1,426.3

(420.1)

(29.5)

 

Income tax and social contribution

146.9

414.3

(267.4)

(64.5)

508.4

754.3

(245.9)

(32.6)

 

Financial result

281.2

(372.7)

653.9

(175.4)

277.4

(712.9)

990.3

(138.9)

 

Other operating revenues (expenses), net

(12.5)

(16.2)

3.7

(22.8)

(23.0)

(21.6)

(1.4)

6.5

(=)

Adjusted EBIT*

747.4

822.9

(75.5)

(9.2)

1,769.0

1,446.1

322.9

22.3

 

Depreciation and amortization

318.0

294.2

23.8

8.1

650.0

578.8

71.2

12.3

(=)

Adjusted EBITDA **

1,065.4

1,117.1

(51.7)

(4.6)

2,419.0

2,024.9

394.1

19.5

 

(%) Adjusted EBITDA margin

30.5

32.5

 

 

34.3

31.3

 

 

(*) Adjusted EBIT is net income before: (i) other operating revenues/expenses, net; (ii) financial result; and (iii) income tax and social contribution.

(**) Adjusted EBITDA is net income before: (i) depreciation and amortization expenses; (ii) income tax and social contribution; (iii) financial result; and (iv) other operating revenues/expenses, net.

 


In 2QT17, net operating revenue, including construction revenue, reached R$
3,494.6 million; a 1.6% increase compared to the same period in 2016.

Costs and expenses, including construction costs, totaled R$ 2,748.8 million, 5.1% higher than in 2Q16.

Adjusted EBIT, in the amount of R$ 747.4 million, decreased 9.2% from R$ 822.9 million recorded in 2Q16.

Adjusted EBITDA, in the amount of R$ 1,065.4 million, decreased 4.6% from R$ 1,117.1 million recorded in 2Q16. (R$ 4,965.5 million in the last twelve months).

The adjusted EBITDA margin was 30.5% in 2Q17 against 32.5% in 2Q16 (33.8% in the last twelve months). Excluding construction revenues and construction costs, the adjusted EBITDA margin was 38.7% in 2Q17 (43.1% in 2Q16 and 44.5% in the last twelve months).

In 2Q17 the Company recorded a net income of R$ 331.8 million, in comparison to a net income of R$ 797.5 million in 2Q16.

 

2. Gross operating revenue

Gross operating revenue from sanitation services, not including construction revenue, totaled R$ 2,901.6 million, an increase of R$178.2 million or 6.5%, when compared to the R$ 2,723.4 million recorded in 2Q16.

The main factors that led to this variation were:

·         Tariff increase of 8.4% since May 2016;

·         Increase of 2.7% in the Company’s total billed volume (2.9% in water and 2.4% in sewage);

·         Bonus granted in 2Q16 amounting to R$ 33.6 million, within the Water Consumption Reduction Incentive Program ended in April 2016; and

·         Lower provisioning for loss of wholesale revenue in 2Q17, in the amount of R$ 21.0 million, due to the payment received in the period.

 

Page 2 of 11


 
 

 

The increase resulting from the above mentioned factors was partially offset by the suspension of the Contingency Tariff in April 2016, in the amount of R$ 64.2 million in 2Q16.

 

3. Construction revenue

Construction revenue decreased R$ 117.8 million or 13.1%, when compared to 2Q16. The variation was mainly due to lower investments in the municipalities served by the Company.


4. Billed volume

 

The following tables show the water and sewage billed volume, on quarter-on-quarter and year-to-date basis, per customer category and region.

 

WATER AND SEWAGE BILLED VOLUME (1) PER CUSTOMER CATEGORY - million m3

 

 

Water

 

 

Sewage

 

Water + Sewage

 

Category

2Q17

2Q16

%

2Q17

2Q16

%

2Q17

2Q16

%

Residential

384.8

377.5

1.9

328.2

320.0

2.6

713.0

697.5

2.2

Commercial

40.8

41.0

(0.5)

39.3

39.0

0.8

80.1

80.0

0.1

Industrial

8.0

8.0

-

9.4

9.8

(4.1)

17.4

17.8

(2.2)

Public

10.4

10.7

(2.8)

9.3

9.4

(1.1)

19.7

20.1

(2.0)

Total retail

444.0

437.2

1.6

386.2

378.2

2.1

830.2

815.4

1.8

Wholesale (3)

64.5

56.9

13.4

8.9

7.5

18.7

73.4

64.4

14.0

Total

508.5

494.1

2.9

395.1

385.7

2.4

903.6

879.8

2.7

 

1H17

1H16

%

1H17

1H16

%

1H17

1H16

%

Residential

783.7

758.0

3.4

666.3

640.4

4.0

1,450.0

1,398.4

3.7

Commercial

82.3

81.4

1.1

78.8

77.2

2.1

161.1

158.6

1.6

Industrial

15.8

15.7

0.6

18.7

19.2

(2.6)

34.5

34.9

(1.1)

Public

20.3

20.3

-

17.9

17.8

0.6

38.2

38.1

0.3

Total retail

902.1

875.4

3.1

781.7

754.6

3.6

1,683.8

1,630.0

3.3

Wholesale (3)

126.3

108.8

16.1

18.0

13.2

36.4

144.3

122.0

18.3

Total

1,028.4

984.2

4.5

799.7

767.8

4.2

1,828.1

1,752.0

4.3

                   

WATER AND SEWAGE BILLED VOLUME (1) PER REGION - million m3

 

Water

 

Sewage

 

Water + Sewage

 

Region

2Q17

2Q16

%

2Q17

2Q16

%

2Q17

2Q16

%

Metropolitan

289.5

283.5

2.1

252.4

246.8

2.3

541.9

530.3

2.2

Regional (2)

154.5

153.7

0.5

133.8

131.4

1.8

288.3

285.1

1.1

Total retail

444.0

437.2

1.6

386.2

378.2

2.1

830.2

815.4

1.8

Wholesale (3)

64.5

56.9

13.4

8.9

7.5

18.7

73.4

64.4

14.0

Total

508.5

494.1

2.9

395.1

385.7

2.4

903.6

879.8

2.7

 

1H17

1H16

%

1H17

1H16

%

1H17

1H16

%

Metropolitan

582.3

562.5

3.5

506.3

488.3

3.7

1,088.6

1,050.8

3.6

Regional (2)

319.8

312.9

2.2

275.4

266.3

3.4

595.2

579.2

2.8

Total retail

902.1

875.4

3.1

781.7

754.6

3.6

1,683.8

1,630.0

3.3

Wholesale (3)

126.3

108.8

16.1

18.0

13.2

36.4

144.3

122.0

18.3

Total

1,028.4

984.2

4.5

799.7

767.8

4.2

1,828.1

1,752.0

4.3

 

  (1) Unaudited

  (2) Including coastal and interior region

  (3) Reused water volume and non-domestic sewage are included in

 

 

 

Page 3 of 11


 
 

 

5. Costs, administrative, selling and construction expenses

In 2Q17, costs, administrative, selling and construction expenses, grew 5.1% (R$ 133.4 million). Excluding construction costs, total costs and expenses increased by 14.2% (R$ 246.6 million).

As a percentage of net revenue, costs and expenses were 78.7% in 2Q17 compared to 76.1% in 2Q16.

               

R$ million

 

2Q17

2Q16

Chg. (R$)

%

1H17

1H16

Chg. (R$)

%

Salaries and payroll charges and Pension plan obligations

716.0

621.3

94.7

15.2

1,304.5

1,195.7

108.8

9.1

General supplies

41.6

42.7

(1.1)

(2.6)

77.6

78.9

(1.3)

(1.6)

Treatment supplies

67.6

66.3

1.3

2.0

138.8

141.4

(2.6)

(1.8)

Services

349.8

316.3

33.5

10.6

632.5

598.7

33.8

5.6

Electricity

187.9

242.8

(54.9)

(22.6)

387.6

483.2

(95.6)

(19.8)

General expenses

239.6

166.7

72.9

43.7

449.5

391.3

58.2

14.9

Tax expenses

28.4

23.3

5.1

21.9

54.3

43.9

10.4

23.7

Sub-total

1,630.9

1,479.4

151.5

10.2

3,044.8

2,933.1

111.7

3.8

Depreciation and amortization

318.0

294.2

23.8

8.1

650.0

578.8

71.2

12.3

Allowance for doubtful accounts

35.7

(35.6)

71.3

(200.3)

121.8

20.4

101.4

497.1

Sub-total

353.7

258.6

95.1

36.8

771.8

599.2

172.6

28.8

Costs, administrative and selling expenses

1,984.6

1,738.0

246.6

14.2

3,816.6

3,532.3

284.3

8.0

Construction costs

764.2

877.4

(113.2)

(12.9)

1,471.4

1,489.8

(18.4)

(1.2)

Costs, adm., selling and construction expenses

2,748.8

2,615.4

133.4

5.1

5,288.0

5,022.1

265.9

5.3

% of net revenue

78.7

76.1

 

 

75.0

77.7

 

 

 

5.1. Salaries and payroll charges and Pension plan obligations

 

There was an increase of R$ 94.7 million in 2Q17, mainly due to:

 

·         Increase of R$ 76.0 million  in provisions for severance pay (TAC), mainly due to the higher number of retired employees  in 2Q17; and

·         Increase of R$ 20.2 million, mostly due to the 1% increase related to the Career and Salary Plan since December 2016 and the 3.71% pay rise in May 2017.

 

5.2. Services

 

Service expenses totaled R$ 349.8 million, R$ 33.5 million more  than the R$ 316.3 million recorded in 2Q16, mostly due to an increase in water and sewage connections and network maintenance services.

 

5.3. Electricity

 

Electricity expenses totaled R$ 187.9 million in 2Q17, a decrease of R$ 54.9 million or 22.6% in comparison to the R$ 242.8 million in 2Q16. The main factors that contributed to this decrease were:

·         Average reduction of 16.1% in the free market tariffs, with an 21.9% increase in consumption;

·         Average reduction of 27.7% in the grid market tariff (TUSD), with a 20.3% rise in consumption; and

·         Average reduction of 7.6% in the regulated market tariffs, with a 11.2%.decrease in consumption.

 

In 2Q17, the free market accounted for 35.2% of the total electricity consumed by the Company, the grid market accounted for 31.6% and the regulated market accounted for 33.2% of total consumption.

 

 

5.4. General expenses

 

General expenses increased R$ 72.9 million, or 43.7%, totaling R$ 239.6 million in 2Q17, versus the R$ 166.7 million recorded in 2Q16, mainly due to:

·         Increase of R$ 42.3 million in provisions for court proceedings in 2Q17; and

·         Higher provision for the Municipal Fund for Environmental Sanitation and Infrastructure, in the amount of R$ 16.0 million, as a result of the increase in revenues with the municipality of São Paulo.

 

Page 4 of 11


 
 

 

 

5.5. Depreciation and amortization

 

Depreciation and amortization increased R$ 23.8 million or 8.1%, reaching R$ 318.0 million in 2Q17 in comparison to the R$ 294.2 million recorded in 2Q16, largely due to the beginning of operations of intangible assets, in the amount of R$ 1.6 billion.


5.6. Allowance for doubtful accounts

 

Increase of R$ 71.3 million, mainly resulting from the receipt of non-recurring court-ordered debt payments from the city of Guarulhos in 2Q16, amounting to R$ 57.8 million.

 

 

6. Financial result

       

R$ million

 

2Q17

2Q16

Chg.

%

Financial expenses, net of income

(72.0)

(81.8)

9.8

(12.0)

Net monetary and exchange variation

(209.2)

454.5

(663.7)

(146.0)

Financial result

(281.2)

372.7

(653.9)

(175.4)

 

6.1. Financial income and expenses

 

       

R$ million

 

2Q17

2Q16

Chg.

%

Financial expenses

 

 

 

 

Interest and charges on international loans and financing

(29.4)

(24.3)

(5.1)

21.0

Interest and charges on domestic loans and financing

(66.0)

(73.1)

7.1

(9.7)

Other financial expenses

(45.4)

(51.3)

5.9

(11.5)

Total financial expenses

(140.8)

(148.7)

7.9

(5.3)

Financial income

68.8

66.9

1.9

2.8

Financial expenses net of income

(72.0)

(81.8)

9.8

(12.0)

                                                                                                    

 

6.1.1. Financial expenses

 

Decrease of R$ 7.9 million, mainly due to the following events:

 

·         Interest and charges on international loans and financing: increase of R$ 5.1 million, mainly due to the appreciation of the dollar and the yen against the real at the end of 2Q17 (4.4% and 3.5%, respectively), versus a depreciation in 2Q16 (-9.8% and -1.4%, respectively); 

 

·         Interest and charges on domestic loans and financing: reduction of R$ 7.1 million, mainly due to a decline in the debt balance following the partial amortizations of the 10th and 15th debenture issues in January and February 2017, respectively, and the full amortization of the 19th issue in  June 2017; and

 

·         Other financial expenses: reduction of R$ 5.9 million, mostly due to lower provisioning for interest on court proceedings in 2Q17.

 

 

Page 5 of 11


 
 

 

6.2. Monetary and exchange rate variation on assets and liabilities

 

       

R$ million

 

2Q17

2Q16

Chg.

%

Monetary variation on loans and financing

(19.1)

(32.8)

13.7

(41.8)

Currency exchange variation on loans and financing

(212.1)

460.8

(672.9)

(146.0)

Other monetary variations

(7.5)

(11.4)

3.9

(34.2)

Monetary/exchange rate variation on liabilities

(238.7)

416.6

(655.3)

(157.3)

Monetary/exchange rate variation on assets

29.5

37.9

(8.4)

(22.2)

Monetary/exchange rate variation, net

(209.2)

454.5

(663.7)

(146.0)

 

 

6.2.1 Monetary and exchange rate variation on liabilities

 

The effect of monetary and currency variations in 2Q17 was R$ 655.3 million higher than in 2Q16, mainly due to:

 

·         Reduction of R$ 13.7 million in expenses with monetary variation on loans and financing, due to the lower variation in the IPCA in 2Q17 compared with 2Q16 (0.2% and 1.8%, respectively); and

 

·         Increase of R$ 672.9 million in exchange variation on loans and financing, as a result of the appreciation of dollar and yen against the real in 2Q17 (4.4% and 3.5%, respectively), versus a devaluation of 9.8% and 1.4%, respectively, in 2Q16.

 

 

6.2.2 Monetary and exchange rate variation on assets

 

Decrease of R$ 8.4 million, mainly due to the lower monetary restatement of judicial deposits in 2Q17.

 

7. Income tax and social contribution

Decrease of R$ 267.4 million, mainly due to the lower  taxable result reported in the period, which was mainly impacted by the appreciation of dollar and yen against the real in 2Q17, versus a devaluation in 2Q16.

 

 

8. Indicators



 

8.1. Operating

 

Operating indicators *

2Q17

2Q16

%

Water connections (1)

8,749

8,527

2.6

Sewage connections (1)

7,189

6,970

3.1

Population directly served - water (2)

24.8

24.6

0.8

Population directly served - sewage (2)

21.4

21.1

1.4

Number of Employees

14,008

14,227

(1.5)

Water volume produced in the quarter (3)

687

669

2.7

Water volume produced in the semester (3)

1,387

1,336

3.8

IPM - Measured water loss (%)

31.5

30.7

2.6

IPDt (liters/connection x day)

308

287

7.3

 

(1)  Total connections, active and inactive, in thousand units at the end of the period

(2)  In million inhabitants, at the end of the period. Not including wholesale

(3)  In millions of cubic meters

(*)  Unaudited

 

 

Page 6 of 11


 
 

8.2. Financial

 

Economic Variables at the close of the quarter*

2Q17

2Q16

Amplified Consumer Price Index Variation (%)

0,22

1,75

Referential Rate Variation (%)

0,1503

0,4888

Interbank Deposit Certificate (%)

10,14

14.13

US DOLAR (R$)

3.3082

3.2098

YEN (R$)

0.02944

0.03123

 

(*) Unaudited

 

9. Loans and financing

 

On July 13, 2017, the Company carried out its 21st Debenture Issue, totaling R$ 500.0 million, in two series, for public offering with restricted placement efforts, pursuant to CVM Instruction 476. The first series, totaling R$150.0 million, is due in three years and is remunerated by the CDI + 0.60% p.a., while the second series, totaling R$ 350.0 million, is due in five years and is remunerated by the CDI + 0.90% p.a. The proceeds of the debenture issue will be allocated to refinance financial commitments maturing in 2017 and to recompose the Company’s cash.

 

               

R$ million

INSTITUTION

2017

2018

2019

2020

2021

2022

2023 Onwards

Total

Local currency

 

 

 

 

 

 

 

 

Caixa Econômica Federal

30.8

65.2

67.1

69.5

73.1

77.0

788.3

1,171.0

Debentures

87.1

896.7

1,014.1

423.2

199.3

178.7

255.7

3,054.8

BNDES

44.0

98.0

112.1

94.0

93.6

93.6

536.7

1,072.0

Leasing

7.8

29.1

30.6

32.2

33.9

35.8

384.6

554.0

Others

0.4

1.4

1.4

1.4

1.4

1.4

4.0

11.4

Interest and other charges

34.6

32.8

-

-

-

-

-

67.4

Total in local currency

204.7

1,123.2

1,225.3

620.3

401.3

386.5

1,969.3

5,930.6

Foreign currency

 

 

 

 

 

 

 

 

IADB

97.6

112.2

112.2

112.2

112.2

112.2

1,104.8

1,763.4

IBRD

-

-

9.0

17.9

18.0

18.0

206.6

269.5

Deutsche Bank 350

-

248.1

240.8

-

-

-

-

488.9

Eurobond

-

-

-

1,155.0

-

-

-

1,155.0

JICA

33.5

67.0

113.7

113.7

113.7

113.6

1,158.0

1,713.2

IDB 1983AB

-

78.8

58.5

57.0

25.4

25.4

23.4

268.5

Interest and other charges

35.7

-

-

-

-

-

-

35.7

Total in foreign currency

166.8

506.1

534.2

1,455.8

269.3

269.2

2,492.8

5,694.2

Total

371.5

1,629.3

1,759.5

2,076.1

670.6

655.7

4,462.1

11,624.8

 

 

10. Conference calls

 

In English

August 15, 2017 - Tuesday

01:00 pm (US EST) / 02:00 pm (Brasília)

Dial in: 1 (412) 317-5486

Conference ID: Sabesp

 

 

Replay available for 7 days

Dial in: +1 (412) 317-0088

Replay ID: 10108124

 

Click here for the webcast

 

 

 

In Portuguese

August 15, 2017 - Tuesday

9:30 am (US EST) / 10:30 am (Brasília)

Dial in: 55 (11) 3127-4971 or

55 (11) 3728-5971

Conference ID: Sabesp

 

Replay available for 7 days

Dial in: +55 (11) 3127-4999

Replay ID: 63650522

 

Click here for the webcast

 

 

 

Page 7 of 11


 
 

For more information, please contact:

 

Mario Arruda Sampaio

Head of Capital Markets and Investor Relations

Phone.(55 11) 3388-8664

E-mail: maasampaio@sabesp.com.br

 

Angela Beatriz Airoldi                                                                         

Investor Relations Manager

Phone.(55 11) 3388-8793

E-mail: abairoldi@sabesp.com.br

 

 

 

Statements contained in this press release may contain information that is forward-looking and reflects management's current view and estimates of future economic circumstances, industry conditions, SABESP performance, and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this press release that do not describe historical facts, such as statements regarding the declaration or payment of dividends, the direction of future operations, the implementation of principal operating and financing strategies and capital expenditure plans, the factors or trends affecting financial condition, liquidity or results of operations are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. There is no guarantee that these results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

Page 8 of 11


 
 

 

Income Statement

 

Brazilian Corporate Law

 

R$ '000

 

2Q17

2Q16

Net Operating Income

3,494,635

3,438,589

Operating Costs

(2,241,443)

(2,267,151)

Gross Profit

1,253,192

1,171,438

Operating Expenses

 

 

Selling

(213,438)

(134,942)

Administrative revenue (expenses)a

(293,914)

(213,278)

Other operating revenue (expenses), net 

12,509

16,183

Operating Income Before Shareholdings 

758,349

839,401

Equity Result 

1,597

(334)

Earnings Before Financial Results, net

759,946

839,067

Financial, net

(69,207)

(88,153)

Exchange gain (loss), net

(212,009)

460,873

Earnings before Income Tax and Social Contribution

478,730

1,211,787

Income Tax and Social Contribution

 

 

Current

(142,403)

(412,214)

Deferred

(4,519)

(2,042)

Net Income for the period

331,808

797,531

Registered common shares ('000)

683,509

683,509

Earnings per shares - R$ (per share)

0.49

1.17

Depreciation and Amortization

(318,023)

(294,182)

Adjusted EBITDA

1,065,460

1,117,066

% over net revenue

30.5%

32.5%

 

 

 

Net Operating Income Breakdown

 

R$ '000

 

2Q17

2Q16

Gross operating income

3,681,012

3,620,621

Water suply - retail

1,483,053

1,435,720

Water suply - wholesale

56,043

22,082

Sewage collection and treatment

1,306,794

1,215,626

Sewage collection and treatment - wholesale

10,616

9,875

Construction revenue - water

456,280

632,749

Construction revenue - sewage

323,141

264,410

Other services

45,085

40,159

Gross sales deductions (Cofins/Pasep)

(186,377)

(182,032)

Net operating income

3,494,635

3,438,589

 

Page 9 of 11


 
 

 

Balance Sheet

 

Brazilian Corporate Law

   

R$ '000

ASSETS

06/30/17

 

12/31/2016

Current assets

 

 

 

Cash and cash equivalents

1,367,605

1,886,221

Trade receivables

1,481,552

1,557,472

Related parties and transactions

204,558

202,553

Inventories

66,677

58,002

Restricted cash

30,597

24,078

Currrent recoverable taxes

82,139

42,633

Other receivables

95,902

52,676

Total current assets

3,329,030

3,823,635

 

 

 

Noncurrent assets

 

 

Trade receivables

186,176

153,834

Related parties and transactions

638,951

669,156

Escrow deposits

56,611

77,915

Deferred income tax and social contribution

170,801

186,345

Water National Agency – ANA

82,926

81,221

Other receivables

125,060

114,693

 

 

 

Equity investments

34,563

31,096

Investment properties

57,913

57,968

Intangible assets

32,180,958

31,246,788

Property, plant and equipment

273,352

302,383

Total noncurrent assets

33,807,311

32,921,399

 

 

 

Total assets

37,136,341

36,745,034

 

 

 

 

LIABILITIES AND EQUITY

06/30/17

 

12/31/2016

Current liabilities

 

 

 

Trade payables

384,174

311,960

Borrowings and financing

1,342,046

1,246,567

Accrued payroll and related charges

511,541

458,299

Taxes and contributions

112,525

168,757

Dividends and interest on capital payable

276

700,034

Provisions

726,971

730,334

Services payable

480,873

460,054

Public-Private Partnership – PPP

33,193

31,898

Program Contract Commitments

103,841

109,042

Other liabilities

118,734

85,563

Total current liabilities

3,814,174

4,302,508

 

 

 

Noncurrent liabilities

 

 

Borrowings and financing

10,282,765

10,717,576

Deferred Cofins and Pasep

134,624

138,071

Provisions

463,671

442,741

Pension obligations

3,310,339

3,265,250

Public-Private Partnership – PPP

2,526,187

2,217,520

Program Contract Commitments

47,723

69,051

Other liabilities

194,196

173,106

Total noncurrent liabilities

16,959,505

17,023,315

 

Total liabilities

20,773,679

21,325,823

 

 

 

Equity

 

 

Paid-up capital

10,000,000

10,000,000

Profit reserve

6,182,140

6,244,859

Other comprehensive income

(825,648)

(825,648)

Retained earnings

1,006,170

-

Total equity

16,362,662

15,419,211

 

 

 

Total equity and liabilities

37,136,341

36,745,034

 

Page 10 of 11


 
 

 

Cash Flow

 

Brazilian Corporate Law

 

R$ '000

 

 

Jan-Jun
2017

Jan-Jun
2016

Cash flow from operating activities

 

 

 

Profit before income tax and social contribution

1,514,557

2,180,610

Adjustment for:

 

 

 

Depreciation and amortization

649,971

578,838

 

Residual value of property, plant and equipment and intangible assets written-off

11,408

4,106

 

Allowance for doubtful accounts

121,860

20,473

 

Provision and inflation adjustment

127,706

147,862

 

Interest calculated on loans and financing payable

191,428

239,883

 

Inflation adjustment and foreign exchange gains (losses) on loans and financing

163,480

(858,439)

 

Interest and inflation adjustment losses

5,347

17,224

 

Interest and inflation adjustment gains

(24,965)

(55,343)

 

Financial charges from customers

(89,398)

(112,094)

 

Margin on intangible assets arising from concession

(30,893)

(32,667)

 

Provision for Consent Decree (TAC)

82,754

6,423

 

Equity result

(3,467)

(1,753)

 

Provision from São Paulo agreement

214,959

12,962

 

Provision for defined contribution plan

-

4,585

 

Pension obligations

152,279

206,620

 

Other adjustments

(14,205)

(6,559)

   

3,072,821

2,352,731

Changes in assets

 

 

 

Trade accounts receivable

32,730

(31,286)

 

Accounts receivable from related parties

28,330

(8,364)

 

Inventories

(8,639)

15,626

 

Recoverable taxes

(39,506)

66,159

 

Escrow deposits

24,525

21,172

 

Other accounts receivable

(55,298)

99,990

Changes in liabilities

 

 

 

Trade payables and contractors

(89,887)

(15,166)

 

Services payable

(194,140)

3,305

 

Accrued payroll and related charges

(29,512)

19,755

 

Taxes and contributions payable

(46,352)

(101,364)

 

Deferred Cofins/Pasep

(3,447)

570

 

Provisions

(110,139)

(79,632)

 

Pension obligations

(107,190)

(90,135)

 

Other liabilities

57,510

(35,223)

     

 

Cash generated from operations

2,531,806

2,218,138

     

 

 

Interest paid

(382,910)

(415,747)

 

Income tax and contribution paid

(499,267)

(427,345)

   

 

 

Net cash generated from operating activities

1,649,629

1,375,046

   

 

 

Cash flows from investing activities

 

 

 

Acquisition of intangibles

(832,919)

(854,534)

 

Restricted cash

(6,519)

2,477

 

Purchases of tangible assets

(10,859)

(18,949)

Net cash used in investing activities

(850,297)

(871,006)

   

 

 

Cash flow from financing activities

 

 

 

Loans and financing

 

 

 

Proceeds from loans

302,803

370,426

 

Repayments of loans

(802,548)

(854,994)

 

Payment of interest on shareholders'equity

(765,933)

(139,395)

 

Public-Private Partnership – PPP

(15,556)

(15,888)

 

Program Contract Commitments

(36,714)

(129,003)

Net cash generated by (used in) financing activities

(1,317,948)

(768,854)

   

Cash reduce and cash equivalents

(518,616)

(264,814)

       

Represented by:

   

Cash and cash equivalents at beginning of the period

1,886,221

1,639,214

Cash and cash equivalents at end of the period

1,367,605

1,374,400

Cash reduce and cash equivalents

(518,616)

(264,814)

 

Page 11 of 11

 

SIGNATURE  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city São Paulo, Brazil.
Date: August 15, 2017
 
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
By: /s/  Rui de Britto Álvares Affonso    
 
Name: Rui de Britto Álvares Affonso
Title: Chief Financial Officer and Investor Relations Officer
 

 

 
FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.