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SABESP (SBS) Q4 Earnings Improve Y/Y on Solid Revenues
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Companhia de Saneamento Basico do Estado de Sao Paulo or SABESP (SBS - Free Report) reported improved year-over-year results for the fourth quarter and full-year 2016. The company’s earnings in the quarter came in at R$1.39 per share or 42 cents per American Depository Receipt (ADR). The bottom line increased roughly 107.5% over the year-ago quarter.
For 2016, the company’s earnings surged 452.6% year over year to R$4.31 per share or $1.23 per ADR.
Revenues
In the quarter, SABESP’s net operating revenue was R$3,885.9 million ($1,177.5 million), increasing 20.6% year over year.
The company’s billed water and sewage volumes increased 5.5% year over year to 910.1 million cubic meters. Of the total volume reported, roughly 56.2% represented water variation and about 43.8% came from sewage.
For 2016, the company generated net operating revenue of R$14,098.2 million ($4,039.6 million), increasing 20.4% year over year. The top line was driven by tariff hike, lower bonus granted under the company’s Water Consumption Reduction Incentive Program and a rise of 4.4% in billed water and sewage volumes.
The company’s water connections grew 2.8% and sewage connections rose 3.4% year over year. Its client base included 24.7 million customers for water and 21.3 million for sewage at the end of 2016.
Margins
In the quarter, SABESP recorded a 17.1% year-over-year increase in costs, administrative, selling and construction expenses, representing 76.4% of net operating revenue compared with 78.6% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) in the quarter increased 26.3% year over year to R$1,209.1 million ($366.4 million) while EBITDA margin grew 140 basis points to 31.1%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, SABESP had cash and cash equivalents of R$1,886.2 million ($580.4 million), up from R$1,415.5 million ($435.5 million) at the prior-quarter end. Borrowings and financing grew 4.3% sequentially to R$10,717.6 million ($3,297.7 million).
In 2016, SABESP generated net cash of R$3,003.6 million ($860.6 million), up 13.7% year over year. Capital spent on the purchase of tangible assets declined 49.6% year over year to R$27.6 million ($7.9 million).
Outlook: SABESP plans to spend nearly R$13,879 million for improving its services, including approximately R$7,098 million on water, R$5,423 million on sewage collection and R$1,358 million on sewage treatment during the period 2017−2021.
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Price and Consensus
With market capitalization of $6.9 billion, SABESP currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the utility industry include Artesian Resources Corporation (ARTNA - Free Report) , SJW Corp. (SJW - Free Report) and Alliant Energy Corporation (LNT - Free Report) . While Artesian Resources sports a Zacks Rank #1 (Strong Buy), both SJW Corp. and Alliant Energy carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Artesian Resources’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 78.51%.
SJW Corp. has a positive average earnings surprise of 36.17% for the trailing four quarters. Also, earnings expectations for 2017 and 2018 have improved over the past 60 days.
Alliant Energy’s earnings estimates for 2017 and 2018 have been revised upward over the last 60 days.
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SABESP (SBS) Q4 Earnings Improve Y/Y on Solid Revenues
Companhia de Saneamento Basico do Estado de Sao Paulo or SABESP (SBS - Free Report) reported improved year-over-year results for the fourth quarter and full-year 2016. The company’s earnings in the quarter came in at R$1.39 per share or 42 cents per American Depository Receipt (ADR). The bottom line increased roughly 107.5% over the year-ago quarter.
For 2016, the company’s earnings surged 452.6% year over year to R$4.31 per share or $1.23 per ADR.
Revenues
In the quarter, SABESP’s net operating revenue was R$3,885.9 million ($1,177.5 million), increasing 20.6% year over year.
The company’s billed water and sewage volumes increased 5.5% year over year to 910.1 million cubic meters. Of the total volume reported, roughly 56.2% represented water variation and about 43.8% came from sewage.
For 2016, the company generated net operating revenue of R$14,098.2 million ($4,039.6 million), increasing 20.4% year over year. The top line was driven by tariff hike, lower bonus granted under the company’s Water Consumption Reduction Incentive Program and a rise of 4.4% in billed water and sewage volumes.
The company’s water connections grew 2.8% and sewage connections rose 3.4% year over year. Its client base included 24.7 million customers for water and 21.3 million for sewage at the end of 2016.
Margins
In the quarter, SABESP recorded a 17.1% year-over-year increase in costs, administrative, selling and construction expenses, representing 76.4% of net operating revenue compared with 78.6% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) in the quarter increased 26.3% year over year to R$1,209.1 million ($366.4 million) while EBITDA margin grew 140 basis points to 31.1%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, SABESP had cash and cash equivalents of R$1,886.2 million ($580.4 million), up from R$1,415.5 million ($435.5 million) at the prior-quarter end. Borrowings and financing grew 4.3% sequentially to R$10,717.6 million ($3,297.7 million).
In 2016, SABESP generated net cash of R$3,003.6 million ($860.6 million), up 13.7% year over year. Capital spent on the purchase of tangible assets declined 49.6% year over year to R$27.6 million ($7.9 million).
Outlook: SABESP plans to spend nearly R$13,879 million for improving its services, including approximately R$7,098 million on water, R$5,423 million on sewage collection and R$1,358 million on sewage treatment during the period 2017−2021.
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Price and Consensus
Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Price and Consensus | Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp Quote
Zacks Rank & Stocks to Consider
With market capitalization of $6.9 billion, SABESP currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the utility industry include Artesian Resources Corporation (ARTNA - Free Report) , SJW Corp. (SJW - Free Report) and Alliant Energy Corporation (LNT - Free Report) . While Artesian Resources sports a Zacks Rank #1 (Strong Buy), both SJW Corp. and Alliant Energy carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Artesian Resources’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 78.51%.
SJW Corp. has a positive average earnings surprise of 36.17% for the trailing four quarters. Also, earnings expectations for 2017 and 2018 have improved over the past 60 days.
Alliant Energy’s earnings estimates for 2017 and 2018 have been revised upward over the last 60 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>