Sao Paulo, Brazil-based Companhia de Saneamento Basico do Estado de Sao Paulo, or SABESP’s (SBS) net income for the fourth quarter 2010 jumped a 12.7% year over year to R$574.9 million (US$340.2 million) or R$2.52 per share (US$2.98 per ADR). Earnings per ADR surpassed the Zacks Consensus Estimate of US$2.33 per ADR.
In the fiscal year 2010, earnings per share improved 8.2% year over year to R$7.16 or US$8.18 per ADR and also surpassed the Zacks Consensus Estimate of US$6.16 per ADR.
Revenue
In the fiscal year, net revenues were R$9,231.0 million (US$5,274.9 million), reflecting an increase of 7.6% year over year and above the Zacks Consensus Estimate of US$4,206 million.
Billed water and sewage volume in the fiscal year went up by 4.1% year over year to 3,426.6 million cubic meters. Of the total volume reported, roughly 58.1% represented water variation and 41.8% of sewage.
Water loss rate in the fourth quarter was stable year over year at 26%. Water volume produced in the quarter went up 3.8% year over year; water connections increased 2.5% and sewage connections rose by 3.6%.
During the fiscal year, SABESP’s cost of sales and services increased 2.1% year over year to R$5,194.5 million (US$2,969.3 million) and represented 56.3% of net revenue. EBITDA at R$3,222.5 million (US$1,841.4 million) registered an 18.2% year-over-year increase with a margin of 34.9%.
Balance Sheet
Exiting the fourth quarter,SABESP had cash and cash equivalents of roughly R$1,989.2 million (US$1,212.9 million) versus R$1,367.2 million (US$799.5 million) in the previous quarter. Loans and financing, net of current portion rose 8.1% sequentially to R$7,022.5 million (US$4,282.0 million) versus R$6,496.3 million (US$3,799.0 million) in the previous quarter.
In the fiscal year 2010, net cash flow from operating activities increased modestly by 05% year over year to R$2,083.0 million (US$1,190.3 million). Capital spending was increased 89.3% year over year to R$87.4 million (US$49.9 million).
Following its fourth quarter 2010 earnings announcement, SABESP keeps up its position as the largest water and sewage services provider in the world, serving roughly 23.6 million water customers and 20.0 million sewage customers.
The company faces stiff competition from Veolia Environnement S.A. (VE), a privately held Thames Water Holdings plc, and GDF Suez (GDFZY.PK).
SABESP -ADR (SBS): Free Stock Analysis Report
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