Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE:SBS) Q1 2020 Earnings Conference Call - Final Transcript

May 19, 2020 • 01:00 pm ET

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Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE:SBS) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon ladies and gentlemen. At this time, we would like to welcome everybody to SABESP's Conference Call to discuss its result in first quarter 2020. The audio of this conference is being broadcast simultaneously through the Internet on the website of www.sabesp.com.br, where you can also find the slide presentation available for download. We inform that all the participants will only be able to listen to the conference during the company's presentation. After the company's remarks are over, there will be a Q&A period. At that time, further instructions will be given. [Operator Instructions]

Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumption of SABESP's management and on information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of SABESP and could cause results to differ materially from those expressed in such forward-looking statements.

Today, with us, we have Rui Affonso, Chief Financial Officer and Investor Relations Officer; Mario Arruda Sampaio, Head of Capital Markets and Investor Relations; and Marcelo Miyagui, Head of Accounting. Now I will turn the conference over to Mario Sampaio. Sir, you may begin your conference.

Executive
Mario Arruda Sampaio

Okay. Thank you everybody to join us on this conference for our first quarter 2020. As usual, we have some slides. Let's go through them and then we are open for question and answer.

So let's move to Slide 3. Here we see a 2.6% growth in total billed volume of water and sewage in the first quarter of the year. The total billed volume increased 2.2%, of which 2% in water and 2.5% in sewage. This is compared to the first quarter of '19 and without considering the municipality of Santo Andre. The increase was chiefly due to the residential category, which moved up by 2.7%. This is mainly in the metro region of Sao Paulo, with emphasis on the municipality of Sao Paulo and Guarulhos. As for the municipality of Santo Andre, as you remember, we service on a wholesale basis up to first quarter '19 and we have been servicing since August 2019 on a retail basis. The drop in billed water volume is natural at the beginning of a retail operations since the losses in the distribution systems are not recognized by SABESB.

On the other hand, there is a relevant increase in the volume sewage treatment in Santo Andre as we did not operate the system at all before we took over. It was possible also to note an increase in volume in the residential category in almost all of the municipalities operated and a trend of greater increase in satellite cities both of