SABESP's Q4 2024 Earnings Call: Unraveling Contradictions in Receivables, Tariffs, and Financial Strategies

These are the key contradictions discussed in SABESP's latest 2024Q4 earnings call, specifically including: Provisions for Doubtful Receivables, New Tariff Structure Implementation, and Tariff Adjustment and Commercial Programs:



Financial Performance and Growth:
- SABESP reported net operational revenues of BRL21.7 billion for 2024, an 8.8% increase compared to the previous year, with EBITDA growing by 18.8% to BRL11.4 billion.
- The growth was driven by a 7.5% net price and mix increase, a 3% growth in volumes, and cost efficiencies from an 11% reduction in workforce through an incentivized dismissal plan.

Capital Expenditure and Infrastructure Investments:
- SABESP invested BRL6.9 billion in water and sewage infrastructure, demonstrating commitment to accelerating universalization.
- The investments were facilitated by expanding the pool of qualified suppliers through a request for proposal model and streamlining project execution timelines.

Personnel Cost Reduction and Efficiency Measures:
- The company reduced its personnel costs by implementing a voluntary termination plan, resulting in a 5.5% decrease in personnel numbers year-on-year.
- The reduction was achieved through accelerated unitization of works, optimization of indirect cost allocation, and increased CapEx execution in the fourth quarter.

Tariff Discount Adjustments and Regulatory Compliance:
- SABESP initiated regulatory steps to recover BRL480 million per year from legacy discount contracts.
- The company standardized billing processes, reducing discrepancies by 28% in Q4 2024, and submitted a proposal for a new discount policy to ARSESP.