Sabesp Reports 12% Revenue Growth in First Half as Debt Surges Following Acquisitions
Brazil's largest water utility posted R$20.2 billion in revenue for the first six months of 2026, but net income fell 11% year-over-year as borrowings jumped to R$52.1 billion.
Revenue Growth Offset by Lower Profitability
Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) reported consolidated net operating revenue of R$20.2 billion for the six months ended June 30, 2026, representing a 12% increase from R$17.4 billion in the prior-year period (6-K filing, 2026-08-14). The São Paulo-based water and sanitation utility, which holds a market capitalization of approximately $16 billion, saw its top-line growth accompanied by deteriorating profitability metrics.
Net income attributable to controlling shareholders declined 11.6% to R$3.20 billion from R$3.62 billion year-over-year. Earnings per share fell to R$0.91 from R$1.06 in the first half of 2025 (6-K filing, 2026-08-14). The profit decline occurred despite gross profit expanding to R$7.77 billion from R$7.27 billion.
Balance Sheet Transformation
The company's balance sheet underwent significant changes during the period. Total consolidated assets reached R$119.6 billion as of June 30, 2026, up from R$104.2 billion at year-end 2025 (6-K filing, 2026-08-14). Much of this growth stemmed from contract assets and concession-related items.
Most notably, consolidated borrowings and financing surged 47% to R$52.1 billion from R$35.5 billion at December 31, 2025. Current borrowings stood at R$5.29 billion, while non-current debt totaled R$46.4 billion (6-K filing, 2026-08-14). The filing indicates the company added non-controlling interests of R$417.1 million from business combinations and subsequently acquired non-controlling interests for R$785.5 million during the half.
Financial Expenses Escalate
Net financial expenses nearly tripled to R$2.04 billion in the first half of 2026 from R$711.3 million in the comparable 2025 period (6-K filing, 2026-08-14). Interest calculated on borrowings and financing payable reached R$2.71 billion, more than doubling from R$1.22 billion year-over-year. Derivative financial instruments recorded mark-to-market changes of R$350.2 million compared to R$33.1 million in the prior year.
The cash flow statement shows the company paid R$1.91 billion in interest during the six-month period, up from R$1.20 billion in 2025 (6-K filing, 2026-08-14).
Operating and Investment Activity
Operating costs rose 22% to R$12.4 billion from R$10.1 billion, outpacing revenue growth. The company generated R$4.13 billion in net cash from operating activities, down slightly from R$4.28 billion in the first half of 2025 (6-K filing, 2026-08-14).
Capital deployment intensified significantly, with R$8.53 billion spent on contract assets, intangible assets, and property, plant and equipment versus R$5.88 billion in the prior year. Investment activities consumed R$13.3 billion in cash, compared to R$4.51 billion in 2025, reflecting both higher capital expenditures and R$302.3 million for subsidiary acquisitions net of cash acquired (6-K filing, 2026-08-14).
The company's financial investments increased to R$13.2 billion from R$7.71 billion at year-end, while cash and cash equivalents declined to R$4.24 billion from R$4.66 billion (6-K filing, 2026-08-14). According to MarginX data, Sabesp is scheduled to report third-quarter 2026 results on November 5, 2026, with an earnings call the following day.
This article was generated by MarginX from the 6-K filing on 2026-08-14. It is not investment advice.