PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
São Paulo, S.P., 05429-900
Federative Republic of Brazil
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
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___
registrant in connection with Rule 12g3-2(b):
CIA. DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO - SABESP
Rui de Britto Álvares Affonso
Chief Financial Officer and Investor Relations Officer
Mario Azevedo de Arruda Sampaio
Head of Capital Markets and Investor Relations
SABESP announces 3Q07 results São Paulo, November 14, 2007 - Companhia de Saneamento Básico do Estado de São Paulo – SABESP (Bovespa: SBSP3; NYSE: SBS), one of the largest water and sewage service providers in the world based on the number of customers, announces today its results for the third quarter of 2007 (3Q07). 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 2006.
|
SBSP3: R$ 42.70 / share |
1. EBITDA grows 17.0% and EBITDA margin reaches 49.1% in the 3Q07
| R$ million | ||||||||||||||||
| 3Q06 | 3Q07 | Chg. | % | 9M06 | 9M07 | Chg. | % | |||||||||
| (+) Gross operating revenue | 1.505,9 | 1.612,0 | 106,1 | 7,0 | 4.384,6 | 4.758,9 | 374,3 | 8,5 | ||||||||
| (-) COFINS and PASEP taxes | 115,0 | 120,2 | 5,2 | 4,5 | 335,8 | 354,7 | 18,9 | 5,6 | ||||||||
| (=) Net operating revenue | 1.390,9 | 1.491,8 | 100,9 | 7,3 | 4.048,8 | 4.404,2 | 355,4 | 8,8 | ||||||||
| (-) Costs and expenses | 916,0 | 914,8 | (1,2) | (0,1) | 2.585,2 | 2.747,5 | 162,3 | 6,3 | ||||||||
| (=) Earnings before financial expenses (EBIT*) | 474,9 | 577,0 | 102,1 | 21,5 | 1.463,6 | 1.656,7 | 193,1 | 13,2 | ||||||||
| (+) Depreciation and amortization | 151,5 | 155,8 | 4,3 | 2,8 | 449,4 | 468,7 | 19,3 | 4,3 | ||||||||
| (=) EBITDA** | 626,4 | 732,8 | 106,4 | 17,0 | 1.913,0 | 2.125,4 | 212,4 | 11,1 | ||||||||
| (%) EBITDA margin | 45,0 | 49,1 | 47,2 | 48,3 | ||||||||||||
| Net income | 195,5 | 382,2 | 186,7 | 95,5 | 698,9 | 970,6 | 271,7 | 38,9 | ||||||||
| Earnings per share (R$)*** | 0,86 | 1,68 | 3,07 | 4,26 | ||||||||||||
(*) Earnings before interest and taxes
(**) Earnings before interest, taxes, depreciation and amortization
(***) Earnings per share include the reverse split held on June 2007 for all analyzed periods in order to enable comparison
In the 3Q07 net operating revenue totaled R$ 1.5 billion, a 7.3% growth compared to the same period last year. Costs and expenses, in the amount of R$ 914.8 million, were 0.1% lower than in the 3Q06.
Earnings before financial expenses (EBIT) climbed by 21.5%, from R$ 474.9 million in the 3Q06 to R$ 577.0 million in the 3Q07. EBITDA moved up by 17.0%, from R$ 626.4 million in the 3Q06 to R$ 732.8 million in the 3Q07. The EBITDA margin went up from 45.0% to 49.1% .
Net income reached R$ 382.2 million, up by 95.5% compared to the R$ 195.5 million recorded in the 3Q06.
2. Gross operating revenue
In the 3Q07, gross operating revenue totaled R$ 1.6 billion, up by R$ 106.1 million, or 7.0%, over the 3Q06. The main reasons for this increase were:
- The 2.6% increase in billed water and sewage volume, being 1.4% in the retail category and 15.2% in the wholesale;
- The 5.0% impact in the 3Q06 regarding the 6.7% tariff readjustment as of August 2006; and
- The 0.2% impact regarding the 4.1% tariff readjustment as of September 2007.
3. Billed volume
The following tables show billed water and sewage volume per customer category and region in the 3Q06, 3Q07, 9M06 and 9M07.
BILLED WATER AND SEWAGE VOLUME(1) PER REGION - million m3
| Water | Sewage | Water + Sewage | ||||||||||||||||
| 3Q06 | 3Q07 | % | 3Q06 | 3Q07 | % | 3Q06 | 3Q07 | % | ||||||||||
| Metropolitan | 257.6 | 260.2 | 1.0 | 211.4 | 215.9 | 2.1 | 469.0 | 476.1 | 1.5 | |||||||||
| Regional (2) | 126.5 | 127.6 | 0.9 | 98.4 | 99.6 | 1.2 | 224.9 | 227.2 | 1.0 | |||||||||
| Total retail | 384.1 | 387.8 | 1.0 | 309.8 | 315.5 | 1.8 | 693.9 | 703.3 | 1.4 | |||||||||
| Wholesale | 66.0 | 69.4 | 5.2 | - | 6.6 | - | 66.0 | 76.0 | 15.2 | |||||||||
| Total | 450.1 | 457.2 | 1.6 | 309.8 | 322.1 | 4.0 | 759.9 | 779.3 | 2.6 | |||||||||
| 9M06 | 9M07 | % | 9M06 | 9M07 | % | 9M06 | 9M07 | % | ||||||||||
| Metropolitan | 770.3 | 781.3 | 1.4 | 629.2 | 646.4 | 2.7 | 1,399.5 | 1,427.7 | 2.0 | |||||||||
| Regional (2) | 384.6 | 391.7 | 1.8 | 297.2 | 303.7 | 2.2 | 681.8 | 695.4 | 2.0 | |||||||||
| Total retail | 1,154.9 | 1,173.0 | 1.6 | 926.4 | 950.1 | 2.6 | 2,081.3 | 2,123.1 | 2.0 | |||||||||
| Wholesale | 196.3 | 203.6 | 3.7 | - | 18.5 | - | 196.3 | 222.1 | 13.1 | |||||||||
| Total | 1,351.2 | 1,376.6 | 1.9 | 926.4 | 968.6 | 4.6 | 2,277.6 | 2,345.2 | 3.0 | |||||||||
(1) Not-audited
(2) Including coastal and interior regions
Page 2 of 11
BILLED WATER AND SEWAGE VOLUME(1) PER CUSTOMER CATEGORY - million m3
| Water | Sewage | Water + Sewage | ||||||||||||||||
| 3Q06 | 3Q07 | % | 3Q06 | 3Q07 | % | 3Q06 | 3Q07 | % | ||||||||||
| Residential | 326.5 | 329.5 | 0.9 | 258.2 | 263.0 | 1.9 | 584.7 | 592.5 | 1.3 | |||||||||
| Commercial | 37.0 | 37.6 | 1.6 | 34.0 | 34.5 | 1.5 | 71.0 | 72.1 | 1.5 | |||||||||
| Industrial | 8.7 | 8.8 | 1.1 | 8.0 | 8.5 | 6.3 | 16.7 | 17.3 | 3.6 | |||||||||
| Public | 11.9 | 11.9 | - | 9.6 | 9.5 | (1.0) | 21.5 | 21.4 | (0.5) | |||||||||
| Total retail | 384.1 | 387.8 | 1.0 | 309.8 | 315.5 | 1.8 | 693.9 | 703.3 | 1.4 | |||||||||
| Wholesale | 66.0 | 69.4 | 5.2 | - | 6.6 | - | 66.0 | 76.0 | 15.2 | |||||||||
| Total | 450.1 | 457.2 | 1.6 | 309.8 | 322.1 | 4.0 | 759.9 | 779.3 | 2.6 | |||||||||
| 9M06 | 9M07 | % | 9M06 | 9M07 | % | 9M06 | 9M07 | % | ||||||||||
| Residential | 983.2 | 998.4 | 1.5 | 773.0 | 793.4 | 2.6 | 1,756.2 | 1,791.8 | 2.0 | |||||||||
| Commercial | 110.7 | 112.9 | 2.0 | 101.2 | 103.3 | 2.1 | 211.9 | 216.2 | 2.0 | |||||||||
| Industrial | 26.0 | 26.2 | 0.8 | 24.2 | 25.1 | 3.7 | 50.2 | 51.3 | 2.2 | |||||||||
| Public | 35.0 | 35.5 | 1.4 | 28.0 | 28.3 | 1.1 | 63.0 | 63.8 | 1.3 | |||||||||
| Total retail | 1,154.9 | 1,173.0 | 1.6 | 926.4 | 950.1 | 2.6 | 2,081.3 | 2,123.1 | 2.0 | |||||||||
| Wholesale | 196.3 | 203.6 | 3.7 | - | 18.5 | 196.3 | 222.1 | 13.1 | ||||||||||
| Total | 1,351.2 | 1,376.6 | 1.9 | 926.4 | 968.6 | 4.6 | 2,277.6 | 2,345.2 | 3.0 | |||||||||
(1) Not-audited
4. Costs, administrative and selling expenses
In the 3Q07, costs, administrative and selling expenses dropped by R$ 1.2 million, or 0.1%, compared to the 3Q06.
| R$ million | ||||||||||||||||
| 3Q06 | 3Q07 | Chg. | % | 9M06 | 9M07 | Chg. | % | |||||||||
| Payroll and benefits | 299.6 | 322.2 | 22.6 | 7.5 | 919.2 | 943.9 | 24.7 | 2.7 | ||||||||
| Supplies | 30.3 | 31.2 | 0.9 | 3.0 | 88.8 | 98.2 | 9.4 | 10.6 | ||||||||
| Treatment supplies | 24.5 | 25.9 | 1.4 | 5.7 | 83.7 | 90.9 | 7.2 | 8.6 | ||||||||
| Third-party services | 119.5 | 108.3 | (11.2) | (9.4) | 332.8 | 370.3 | 37.5 | 11.3 | ||||||||
| Electric power | 115.5 | 118.0 | 2.5 | 2.2 | 330.3 | 360.6 | 30.3 | 9.2 | ||||||||
| General expenses | 53.6 | 62.6 | 9.0 | 16.8 | 118.5 | 158.1 | 39.6 | 33.4 | ||||||||
| Depreciation and amortization | 151.5 | 155.8 | 4.3 | 2.8 | 449.4 | 468.7 | 19.3 | 4.3 | ||||||||
| Credit write-offs | 114.2 | 82.1 | (32.1) | (28.1) | 238.3 | 231.4 | (6.9) | (2.9) | ||||||||
| Tax expenses | 7.3 | 8.7 | 1.4 | 19.2 | 24.2 | 25.4 | 1.2 | 5.0 | ||||||||
| Costs, administrative and selling | ||||||||||||||||
| expenses | 916.0 | 914.8 | (1.2) | (0.1) | 2,585.2 | 2,747.5 | 162.3 | 6.3 | ||||||||
| % over net revenue | 65.9 | 61.3 | 63.9 | 62.4 | ||||||||||||
4.1. Payroll and benefits
In the 3Q07 the number of connections per employee improved by 5.2%, from 667 in the 3Q06 to 702 in the 3Q07 and the number of employees dropped from 17,303 to 16,880.
Year-on-year, payroll and benefits grew by R$ 22.6 million, or 7.5%, from R$ 299.6 million to R$ 322.2 million in the 3Q07, due to the following factors:
- Wage increase of 3.37% as of May 2007; and
- Increase in the provision for pension plan obligations, as determined by CVM Resolution 371, in the amount of R$ 13.0 million, mainly as a result of the adoption of a new mortality rate table, as of January 2007.
Page 3 of 11
4.2. Supplies
In the 3Q07, supplies grew by R$ 0.9 million, or 3.0%, over the same period last year, from R$ 30.3 million to R$ 31.2 million, mainly regarding residential water connection maintenance.
4.3. Treatment supplies
Treatment supplies grew by R$ 1.4 million, or 5.7%, from R$ 24.5 million in the 3Q06 to R$ 25.9 million this quarter.
The main variation was in the consumption of cooper sulfate, which grew from 98 to 287 tonnes, as a result of the proliferation of algae, mainly at the Cantareira System, due to natural causes, such as the increase in insolation and in some nutrients which favor its growth. This was a preventive action since, if not treated, algae can cause problems of taste and smell.
4.4. Third-party services
In the 3Q07, third-party services dropped by R$ 11.2 million, or 9.4%, from R$ 119.5 million in the 3Q06 to R$ 108.3 million. The main reasons for this result were the:
- R$ 17.7 million decrease due to the change in the booking of expenses related to the software licenses agreement over a period of 36 months.
This drop was partially offset by the following:
- Hydrometer reading and bill delivery, in the amount of R$ 2.0 million, mainly as a result of the 5.6% contract update as of May 2007;
- Technical services, in the amount of R$ 1.7 million, for the following:
| a |
Development of an equipment calibration and verification methodology; |
|
| a |
Expansion of the implementation of the Geographical Data System (SIGNOS) in municipalities other than the São Paulo Metropolitan Region served by the Company; and |
|
| a |
Auditing of internal control tests in order to comply with the requirements of the Sarbanes Oxley Law. |
|
- The R$ 1.4 million increase in expenses with surveillance, due to the hiring of new remote monitoring. Despite the drop in the number of personnel hired, the benefited area was expanded, thus increasing this expense; and
- Increase in expenses with paving and replacing pavement in the amount of R$ 1.2 million, due to the accumulation of works to be executed during the period in which some maintenance areas in the São Paulo Metropolitan Region were left without contracts.
4.5. Electric power
In the 3Q07 electric power increased by R$ 2.5 million, or 2.2%, from R$ 115.5 million in the 3Q06 to R$ 118.0 million, as a result of the 0.2% increase in consumption and of the 4.3% increase in the average electric power tariff (3.1% in the captive market and 10.4% in the free market). This increase was substantially lower than the increase in tariff, underlining the positive results of the Company’s action to control electric power supply in the later period.
4.6. General expenses
In the 3Q07, general expenses moved up R$ 9.0 million, or 16.8%, from R$ 53.6 million to R$ 62.6 million, mainly due to:
Page 4 of 11
- Financial and Institutional support to several institutions in the amount of R$ 3.1 million;
- Provisions for contingencies in the amount of R$ 2.4 million;
- Charges for the use of water in the Paraíba do Sul River, Capivari, Piracicaba and Jundiaí basins in the amount of R$ 1.2 million; and
- The R$ 1.2 million increase due to the acquisition of antivirus for all the Company’s servers and computers, and technical support.
4.7. Depreciation and amortization
Depreciation and amortization grew by R$ 4.3 million, or 2.8%, from R$ 151.5 million in the 3Q06 to R$ 155.8 million in the 3Q07, regarding the transfer of assets from works in place to permanent operating.
4.8. Credit write-off
Write-offs declined by R$ 32.1 million, or 28.1%, from R$ 114.2 million in the 3Q06 to R$ 82.1 million in the 3Q07, mainly due to provisioning for invoices in the amount of R$ 29.8 million in the 3Q06.
4.9. Tax expenses
In the 3Q07, tax expenses rose by R$ 1.4 million or 19.2%, from R$ 7.3 million to R$ 8.7 million, mostly as a result of the payment of CPMF tax in the amount of R$ 1.5 million, arising from the payment of the principal and interest of the 1st series of the 6th and 7th debenture issue in September 2007.
5. Financial expenses and revenues
5.1. Financial expenses
In the 3Q07, financial expenses fell by R$ 6.1 million, or 3.8%, as follows:
| R$ million | ||||||||
| 3Q06 | 3Q07 | Chg. | % | |||||
| Financial expenses | ||||||||
| Interest and charges on domestic loans and financing | 127.6 | 111.7 | (15.9) | (12.5) | ||||
| Interest and charges on international loans and financing | 22.2 | 16.5 | (5.7) | (25.7) | ||||
| Other financial expenses | 6.8 | 4.8 | (2.0) | (29.4) | ||||
| Provisions | 2.6 | 20.1 | 17.5 | 673.1 | ||||
| Total financial expenses | 159.2 | 153.1 | (6.1) | (3.8) | ||||
| Financial revenues | 21.4 | 23.7 | 2.3 | 10.7 | ||||
| Financial expenses net of revenues | 137.8 | 129.4 | (8.4) | (6.1) | ||||
The highlights for domestic financing were:
- The R$ 15.9 million drop in provisions for interest on domestic loans, mainly due to the payment of the 2nd series of the 5th debenture issue in March 2007; amortization of the 1st series of the 6th debenture issue in September 2007; payment of the principal amount of the agreement with Banco do Brasil which had an impact on interest calculation; the decline in the DI rate, which contributed to the decrease in interest calculation and the amortization of the FIDC as of October 2006.
The highlights for foreign financing were:
- The R$ 4.7 million drop due to the prepayment of part of 2008 Eurobonds in November 2006. With the new funding, 2016 Eurobonds, interest rates fell from 12% p.a. to 7.5% p.a., and, along with the depreciation of
Page 5 of 11
the US Dollar in relation to the Brazilian Real, contributed to reduce the outstanding balance (on which interest calculation is based); and |
- The R$ 1.0 million drop in interest calculation, due to the payment of the agreements IDB #299 in October 2007 and World Bank # 3504 in April 2007;
Other financial expenses:
- Dropped by R$ 2.0 million, specially due to the decrease in the long term interest rate (TJLP) for the analyzed period, over the interest of PAES (special installment program) in the amount of R$ 1.7 million.
Provisions:
- Rose by R$ 17.5 million due to interest and monetary updates of lawsuits.
5.2. Financial revenues
Financial revenues grew by R$ 2.3 million, or 10.7%, due to the interest calculated over the installment agreements.
6. Passive and active monetary variation
| R$ million | ||||||||
| 3Q06 | 3Q07 | Chg. | % | |||||
| Monetary variation over loans and financing | 14.7 | 7.9 | (6.8) | (46.3) | ||||
| Currency exchange variation over loans and financing | (2.6) | (35.5) | (32.9) | 1,265.4 | ||||
| Other monetary variation | 7.7 | 24.7 | 17.0 | 220.8 | ||||
| Passive monetary variation | 19.8 | (2.9) | (22.7) | (114.6) | ||||
| Active monetary variation | (4.5) | (8.5) | (4.0) | 88.9 | ||||
| Monetary/currency exchange variation, net | 15.3 | (11.4) | (26.7) | (174.5) | ||||
6.1. Passive monetary variation
In the 3Q07 recorded a R$ 22.7 million drop, due to the:
- R$ 32.9 million drop in the exchange variation calculated over loans and financing, mainly as a result of the substantial depreciation of 4.53% of the US Dollar in relation to the Brazilian Real in the 3Q07 versus an appreciation of 0.5% in the 3Q06, as follows:
| a |
R$ 23.0 million regarding the Eurobonds; and |
|
| a |
R$ 9.9 million regarding the exchange variation over the agreement with the IDB, resulting from the US dollar variation and the amortization executed in the period, highlighting the variation of the currency basket, which was positive by 3.06% in
the 3Q07 versus a negative variation of 1.14% in the 3Q06. |
|
- R$ 6.8 million drop in the monetary variation of the agreement with the Federal Government / Banco do Brasil, mostly as a result of the lower TR variation, coming to 0.33% in the 3Q07 versus 0.57% in the 3Q06, in addition to the lower outstanding balance due to the settlement of the installments due in the period;
- R$ 14.3 million increase in the monetary variation calculated over the debentures, mainly resulting from the higher IGPM index, standing at 2.57% in the 3Q07 versus 0.84% in the 3Q06; and
- R$ 2.6 million increase in monetary variation in amounts for indemnification of lawsuits.
Page 6 of 11
6.2. Active monetary variation
Active monetary variation increased by R$ 4.0 million, or 88.9%, due to the updates in the Company’s installment agreement.
7. Non operating revenue
Non-operating revenue fell by R$ 6.1 million especially as a result of the sale of land in the amount of R$ 4.4 million.
8. Operating indicators
The following table shows the continuous expansion of the services rendered by the Company.
| Operating indicators* | 3Q06 | 3Q07 | % | |||
| Water connections (1) | 6,575 | 6,728 | 2.3 | |||
| Sewage connections (1) | 4,971 | 5,119 | 3.0 | |||
| Population directly served - water (2) | 22,647.0 | 22,899.0 | 1.1 | |||
| Population directly served - sewage (2) | 18,518.0 | 18,772.0 | 1.4 | |||
| Number of employees | 17,303 | 16,880 | (2.4) | |||
| Number of water and sewage connections per employee | 667 | 702 | 5.2 | |||
| Water losses (%) | 31.9 | 30.3 | ||||
(1) In thousand units at the end of the period
(2) In thousand inhabitants at the end of the period, not including wholesale
* Not-audited
9. Loans and financing
On September 2007, the Company settled R$ 248 million of the 1st series of the 6th debentures issuance, which total initial value corresponded to R$ 600 million.
| R$ million | ||||||||||||||||
| INSTITUTION | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 and onwards | Total | ||||||||
| Domestic | ||||||||||||||||
| Banco do Brasil | 56.3 | 237.6 | 258.7 | 281.5 | 306.4 | 333.5 | 458.7 | 1,932.7 | ||||||||
| Caixa Econômica Federal | 13.6 | 57.0 | 60.5 | 65.0 | 70.3 | 76.0 | 200.7 | 543.1 | ||||||||
| Debentures | - | - | 761.2 | 310.4 | 374.3 | - | - | 1,445.9 | ||||||||
| FIDC - SABESP I | 13.9 | 55.6 | 55.6 | 55.5 | 13.9 | - | - | 194.5 | ||||||||
| BNDES | 9.5 | 37.8 | 37.9 | 37.9 | 37.9 | 32.0 | 3.3 | 196.3 | ||||||||
| Others | 0.8 | 4.2 | 6.7 | 6.1 | 5.5 | - | - | 23.3 | ||||||||
| Interest and charges | 35.9 | 39.8 | 12.3 | 12.3 | 3.1 | - | - | 103.4 | ||||||||
| Domestic total | 130.0 | 432.0 | 1,192.9 | 768.7 | 811.4 | 441.5 | 662.7 | 4,439.2 | ||||||||
| International | ||||||||||||||||
| IDB | 23.9 | 66.0 | 66.0 | 66.0 | 66.0 | 66.0 | 448.6 | 802.5 | ||||||||
| Eurobonds | - | 180.3 | - | - | - | - | 257.5 | 437.8 | ||||||||
| JBIC | - | - | - | - | 0.6 | 1.2 | 21.3 | 23.1 | ||||||||
| Interest and charges | 22.1 | 3.7 | - | - | - | - | - | 25.8 | ||||||||
| International total | 46.0 | 250.0 | 66.0 | 66.0 | 66.6 | 67.2 | 727.4 | 1,289.2 | ||||||||
| Total | 176.0 | 682.0 | 1,258.9 | 834.7 | 878.0 | 508.7 | 1,390.1 | 5,728.4 | ||||||||
Page 7 of 11
10. Conference call
| In Portuguese | In English |
| November 21, 2007 | November 21, 2007 |
| 11:00 am (US EST) / 2:00 pm (Brasília) | 1:00 pm (US EST) / 4:00 pm (Brasília) |
| Dial in access: 55 11 2101-4848 | Dial in access: 1 973 935-8893 |
| Conference ID: Sabesp | Conference ID: 9302812 |
| Replay – available until 11/28/2007 | Replay – available until 11/28/2007 |
| Dial in access: 55 11 2101-4848 | Dial in access: 1 973 341-3080 |
| Replay ID: Sabesp | Replay ID: 9302812 |
Live broadcast through the Internet at www.sabesp.com.br
For more information, please contact:
Mario Arruda Sampaio
Phone.(55 11) 3388-8664
E-mail: maasampaio@sabesp.com.br
Angela Beatriz Airoldi
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
| Corporate Law Method (Law No. 6,404/76) | R$ thousand | |||||
| 3Q07 | 3Q06 | % | ||||
| Gross Revenue from Sales and Services | 1,612,065 | 1,505,829 | 7.1 | |||
| Water Supply - Retail | 830,724 | 777,187 | 6.9 | |||
| Water Supply - Wholesale | 73,738 | 66,379 | 11.1 | |||
| Sewage Collection and Treatment | 681,415 | 638,628 | 6.7 | |||
| Sewage Collection and Treatment - Wholesale | 2,378 | - | - | |||
| Other Services | 23,810 | 23,635 | 0.7 | |||
| Taxes on Sales and Services - COFINS and PASEP | (120,241) | (114,987) | 4.6 | |||
| Net Revenue from Sales and Services | 1,491,824 | 1,390,842 | 7.3 | |||
| Costs of Sales and Services | (663,532) | (632,392) | 4.9 | |||
| Gross Profit | 828,292 | 758,450 | 9.2 | |||
| Selling Expenses | (163,117) | (190,523) | (14.4) | |||
| Administrative Expenses | (88,119) | (93,026) | (5.3) | |||
| Operating Income before Financial Expenses and | 577,056 | 474,901 | 21.5 | |||
| Foreing Exchange gain (loss), net | ||||||
| Financial Income and Expenses, net | (153,243) | (155,636) | (1.5) | |||
| Foreing Exchange gain (loss), net | 35,242 | 2,514 | 1,301.8 | |||
| Operating Income | 459,055 | 321,779 | 42.7 | |||
| Non-Operating Expenses (Income) | ||||||
| Non-Operating Income | (990) | 5,476 | (118.1) | |||
| Non-Operating Expense | (3,863) | (4,266) | (9.4) | |||
| Income (loss) before Taxes on Income | 454,202 | 322,989 | 40.6 | |||
| Income and Social Contribution Taxes | ||||||
| Current Income Tax/Social Contribution | (71,530) | (122,815) | (41.8) | |||
| Deferred Income Tax/Social Contribution | (471) | 4,060 | (111.6) | |||
| Income (loss) before Extraordinary Item | 382,201 | 204,234 | 87.1 | |||
| Extraordinary item, net of income taxes and social contribution | - | (8,780) | (100.0) | |||
| Net Income (loss) | 382,201 | 195,454 | 95.5 | |||
| Registered common shares (thousand of shares) | 227,836 | 28,479,577 | (99.2) | |||
| Earnings (loss) per thousand shares in R$ | 1.68 | 0.01 | - | |||
| Depreciation and Amortization | (155,751) | (151,494) | - | |||
| EBITDA | 732,808 | 626,395 | 17.0 | |||
| % over net revenue | 49.1% | 45.0% | ||||
Page 9 of 11
Balance Sheet
| Brazilian Corporate Law | R$ thousand | |||
| ASSETS | 09/30/2007 | 06/30/2007 | ||
| Cash and Cash Equivalents | 445,515 | 511,301 | ||
| Accounts Receivable, net | 1,194,507 | 1,121,941 | ||
| Accounts Receivable from Shareholders | 336,962 | 362,250 | ||
| Inventory | 39,898 | 39,874 | ||
| Taxes and contributions | 31,077 | 8,287 | ||
| Other Receivables | 53,054 | 43,074 | ||
| Deferred income tax and social contribution | 23,239 | 16,098 | ||
| Total Current Assets | 2,124,252 | 2,102,825 | ||
| Accounts Receivable, net | 280,473 | 276,224 | ||
| Accounts Receivable from Shareholders | 915,572 | 889,820 | ||
| Indemnities Receivable | 148,794 | 148,794 | ||
| Judicial Deposits | 38,750 | 45,546 | ||
| Taxes and contributions | 333,957 | 341,939 | ||
| Other Receivables | 57,336 | 55,848 | ||
| Investments | 720 | 720 | ||
| Permanent Assets | 13,944,287 | 13,855,676 | ||
| Intangible Assets | 489,791 | 489,878 | ||
| Deferred Assets | 4,334 | 5,725 | ||
| Total Permanent Assets | 16,214,014 | 16,110,170 | ||
| Total Assets | 18,338,266 | 18,212,995 | ||
| LIABILITIES | 09/30/2007 | 06/30/2007 | ||
| Suppliers and Constructors | 128,095 | 91,722 | ||
| Loans and Financing | 729,507 | 988,696 | ||
| Salaries and Payroll Charges | 224,910 | 185,698 | ||
| Taxes and contributions payable | 127,757 | 133,059 | ||
| Taxes and contributions | 74,376 | 75,843 | ||
| Interest on Own Capital Payable | 646,286 | 396,435 | ||
| Provivion for Judicial Pendencies | 62,386 | 39,568 | ||
| Services Payable | 146,414 | 143,479 | ||
| Other Payables | 79,915 | 71,437 | ||
| Total Current Liabilities | 2,219,646 | 2,125,937 | ||
| Loans and Financing | 4,998,895 | 5,081,250 | ||
| Taxes and contributions payable | 206,262 | 214,642 | ||
| Deferred Taxes and Contributions | 153,808 | 152,273 | ||
| Provision for Contingencies | 586,328 | 627,866 | ||
| Pension Fund Obligations | 354,263 | 343,249 | ||
| Other Payables | 86,332 | 52,236 | ||
| Long Term Liabilities | 6,385,888 | 6,471,516 | ||
| Capital Stock | 3,403,688 | 3,403,688 | ||
| Capital Reserves | 119,166 | 115,330 | ||
| Revaluation Reserves | 2,361,714 | 2,383,910 | ||
| Profit Reserves | 3,080,605 | 3,080,605 | ||
| Accrued income | 767,559 | 632,009 | ||
| Shareholder's Equity | 9,732,732 | 9,615,542 | ||
| Total Liabilities and Shareholder's Equity | 18,338,266 | 18,212,995 | ||
Page 10 of 11
Cash Flow
| Brazilian Corporate Law | R$ thousand | |||
| Description | Jun-Sep/07 | Jun-Sep/06 | ||
| Cash flow from operating activities | ||||
| Net income for the period | 382,201 | 195,454 | ||
| Adjustments for reconciliation of net income | ||||
| Deferred income tax and social contribution | 909 | (2,240) | ||
| Provisions for contingencies | 40,187 | 26,191 | ||
| Reversion of provision for losses | (6) | (6,595) | ||
| Other provisions | 66 | - | ||
| Liabilities related to pension plans | 14,856 | 14,981 | ||
| Loss in the wirte-off of property, plant and equipment | 3,838 | 3,192 | ||
| Deferred asset write-offs | - | 2,637 | ||
| Investment write-offs | - | 21 | ||
| Gain with the sale of property | 219 | (4,371) | ||
| Depreciation and Amortization | 155,750 | 151,493 | ||
| Interest calculated on loans and financing payable | 129,659 | 151,913 | ||
| Foreign exchange loss on loans and financing | (5,724) | 19,687 | ||
| Passive monetary exchange variation and interest | 2,930 | 4,111 | ||
| Active monetary exchange variation and interest | (4,025) | (2,788) | ||
| Provisions for bad debt | 82,088 | 114,169 | ||
| Adjusted Net Income | 802,948 | 667,855 | ||
| (Increase) decrease in assets | ||||
| Clients | (128,602) | (27,500) | ||
| Accounts receivable from shareholders | 26,631 | (128,872) | ||
| Inventories | (18) | (970) | ||
| Recoverable Taxes | (22,790) | 3,312 | ||
| Other accounts receivable | (10,714) | (9,827) | ||
| Change in long term assets | ||||
| Clients | (29,637) | (21,060) | ||
| Accounts receivable from shareholders | (24,300) | (23,919) | ||
| Judicial deposits | 2,853 | 5,989 | ||
| Other accounts receivable | (1,027) | (1,769) | ||
| (187,604) | (204,616) | |||
| Increase (decrease) in liabilities | ||||
| Accounts payable to suppliers and contractors | 40,703 | (18,839) | ||
| Salaries and payroll charges | 39,212 | 12,514 | ||
| Payable interest on own capital | 1 | - | ||
| Taxes and contributions | (16,612) | (17,755) | ||
| Services payable | 2,935 | 30,858 | ||
| Other accounts payable | 7,330 | 1,440 | ||
| Pension plan | (3,842) | (3,712) | ||
| Provision for contingencies | (20,055) | (9,680) | ||
| Increase (decrease) in non current liabilities | ||||
| Other accounts payable - long term | 1,107 | 1,109 | ||
| 50,779 | (4,065) | |||
| Net cash from operating activities | 666,123 | 459,174 | ||
| Cash flow from investing activities | ||||
| Acquisition of property, plant and equipment | (244,704) | (171,252) | ||
| Increase in intangible assets | (4,951) | (2,895) | ||
| Sale of property, plant and equipment | - | 5,649 | ||
| Increase in Deferred Assets | - | (2,665) | ||
| Net cash used in investing activities | (249,655) | (171,163) | ||
| Cash flow from financing activities | ||||
| Loans and Financing - long term | ||||
| Funding | 30,128 | 46,791 | ||
| Payments | (493,385) | (270,765) | ||
| Interest on own capital payment | (18,997) | (615) | ||
| Net cash used in financing activities | (482,254) | (224,589) | ||
| Net increase (decrease) in cash equivalents | (65,786) | 63,422 | ||
| Cash and cash equivalents at the beginning of the period | 511,301 | 336,012 | ||
| Cash and cash equivalents at the end of the period | 445,515 | 399,434 | ||
| Change in Cash | (65,786) | 63,422 | ||
| Additional information on cash flow: | ||||
| Interest and taxes over loans and financing | 147,879 | 154,380 | ||
| Capitalization of interest and financial charges | (2,222) | 9,211 | ||
| Payable income tax and social contribution | 126,414 | 131,262 | ||
| Property, plant and equip. received as donations and/or paid in stocks | 3,836 | 3,864 | ||
| COFINS and PASEP taxes payable | 110,950 | 106,833 | ||
| Paraguaçu Paulista Agreement | 34,071 | - | ||
Page 11 of 11
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Companhia de Saneamento Básico do Estado de São Paulo - SABESP |
||
By: |
/S/ Rui de Britto Álvares Affonso
|
|
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Name: Rui de Britto Álvares Affonso
Title: Chief Financial Officer and Investor Relations Officer |
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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.