SABESP’s (SBS - Free Report) net income in the second quarter of 2018 declined 45.2% year over year to R$181.9 million ($47.1 million). Earnings per share were R$0.27, down from the year-ago figure of R$0.49.
Considering the ADR equivalent of earnings per share, the bottom line in the reported quarter was 8 cents, lagging the Zacks Consensus Estimate of 25 cents by 68%. Also, the results marked a 46.7% decline from the year-ago quarter’s earnings of 15 cents.
Revenues Improve Y/Y
In the reported quarter, SABESP's net operating revenues (including construction revenues) were R$3,672.2 million ($949.9 million), up 5.1% year over year. The figure missed the Zacks Consensus Estimate of $1,089 million.
However, the year-over-year improvement was driven by favorable impact from the tariff-repositioning index, and an increase in billed-water and sewage volumes.
Highlights of the release
Costs and expenses, which include construction costs, totaled R$2,617.5 million ($677.1), reflecting a 4.8% year-over-year decline.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were R$1,382.6 million ($357.7 million), up 29.8% year over year.
Billed water and sewage volumes in the quarter grew 3.1% year over year to 931.4 million cubic meters. The company's water connections increased 2.4% in the second quarter of 2018 and sewage connection increased 2.9% from second-quarter 2017 level.
Balance Sheet & Cash Flow
As of Jun 30, 2018, SABESP's cash and cash equivalents were R$2,832.8 million ($732.8 million), up from R$2,283 million ($688.8 million) at the end of 2017. Borrowings and financing grew 12.7% in the first six months of 2018 to R$1,968.9 million ($509.3 million).
Cash generation from operations in the first six months of 2018 was R$2,621.9 million ($762.7 million) versus R$2,369.2 million in the year-ago period.
During the quarter, the company invested R$757.8 million ($195.2 million)
Outlook
SABESP plans to spend nearly R$17,294 million in the 2018-2022 time frame for improving its services. Of this, approximately R$7,120 million will be spent on water, R$7,732 million on sewage collection and R$2,442 million on sewage treatment.
The company aims to add 783,000 new water connections by 2022 and nearly 1.1 million sewage connection within 2022.
Zacks Rank
SABESP currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Other Water Supply Utilities’ Release
Here are some other players from the water utility space that have reported second-quarter earnings:
American Water Works Co. (AWK - Free Report) beat the Zacks Consensus Estimate by 2.3%, SJW Group (SJW - Free Report) reported in-line earnings, while American States Water Company (AWR - Free Report) missed the same by 8.3%.
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SABESP’s (SBS - Free Report) net income in the second quarter of 2018 declined 45.2% year over year to R$181.9 million ($47.1 million). Earnings per share were R$0.27, down from the year-ago figure of R$0.49.
Considering the ADR equivalent of earnings per share, the bottom line in the reported quarter was 8 cents, lagging the Zacks Consensus Estimate of 25 cents by 68%. Also, the results marked a 46.7% decline from the year-ago quarter’s earnings of 15 cents.
Revenues Improve Y/Y
In the reported quarter, SABESP's net operating revenues (including construction revenues) were R$3,672.2 million ($949.9 million), up 5.1% year over year. The figure missed the Zacks Consensus Estimate of $1,089 million.
However, the year-over-year improvement was driven by favorable impact from the tariff-repositioning index, and an increase in billed-water and sewage volumes.
Highlights of the release
Costs and expenses, which include construction costs, totaled R$2,617.5 million ($677.1), reflecting a 4.8% year-over-year decline.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were R$1,382.6 million ($357.7 million), up 29.8% year over year.
Billed water and sewage volumes in the quarter grew 3.1% year over year to 931.4 million cubic meters. The company's water connections increased 2.4% in the second quarter of 2018 and sewage connection increased 2.9% from second-quarter 2017 level.
Balance Sheet & Cash Flow
As of Jun 30, 2018, SABESP's cash and cash equivalents were R$2,832.8 million ($732.8 million), up from R$2,283 million ($688.8 million) at the end of 2017. Borrowings and financing grew 12.7% in the first six months of 2018 to R$1,968.9 million ($509.3 million).
Cash generation from operations in the first six months of 2018 was R$2,621.9 million ($762.7 million) versus R$2,369.2 million in the year-ago period.
During the quarter, the company invested R$757.8 million ($195.2 million)
Outlook
SABESP plans to spend nearly R$17,294 million in the 2018-2022 time frame for improving its services. Of this, approximately R$7,120 million will be spent on water, R$7,732 million on sewage collection and R$2,442 million on sewage treatment.
The company aims to add 783,000 new water connections by 2022 and nearly 1.1 million sewage connection within 2022.
Zacks Rank
SABESP currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Other Water Supply Utilities’ Release
Here are some other players from the water utility space that have reported second-quarter earnings:
American Water Works Co. (AWK - Free Report) beat the Zacks Consensus Estimate by 2.3%, SJW Group (SJW - Free Report) reported in-line earnings, while American States Water Company (AWR - Free Report) missed the same by 8.3%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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