6-K 1 sbspr4q07_6k.htm SABESP ANNOUNCES 2007 RESULTS Provided by MZ Data Products

 


 
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For April 9, 2008

(Commission File No. 1-31317)
 

 
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
(Exact name of registrant as specified in its charter)
 
Basic Sanitation Company of the State of Sao Paulo - SABESP
(Translation of Registrant's name into English)
 


Rua Costa Carvalho, 300
São Paulo, S.P., 05429-900
Federative Republic of Brazil
(Address of Registrant's principal executive offices)



Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1)__.

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7)__.

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):



CIA. DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO - SABESP
Rui de Britto Álvares Affonso
Chief Financial Officer and Investor Relations Officer
Mario Azevedo de Arruda Sampaio
Head of Capital Markets and Investor Relations

 

SABESP announces 2007 results

São Paulo, March 28, 2008 - Companhia de Saneamento Básico do Estado de São Paulo – SABESP (Bovespa: SBSP3; NYSE: SBS), one of the largest water and sewage service providers in the world based on the number of customers, announces today its results for the fourth quarter of 2007 (4Q07) and fiscal year 2007. The Company’s operating and financial information, except when indicated otherwise, is presented in Brazilian Reais, in accordance with the Brazilian Corporate Law. All comparisons in this release, unless otherwise stated, refer to the same period of 2006.

SBSP3: R$ 38.75 / share
SBS US$ 44.17 (ADR=2 shares)
Total shares: 227,836,623
Market value: R$ 8.8 billion
Closing Price: 03/28/2008

 




1. Net revenue grows 8.0%, EBITDA grows 10.3% and net income grows 34.6% in 2007

                            R$ million 
 
    4Q06    4Q07    Chg.    %    2006    2007    Chg.    % 
 
(+) Gross operating revenue    1,599.3    1,689.2    89.9    5.6    5,984.0    6,448.2    464.2    7.8 
(-) COFINS and PASEP taxes    120.9    122.6    1.7    1.4    456.7    477.4    20.7    4.5 
(=) Net operating revenue    1,478.4    1,566.6    88.2    6.0    5,527.3    5,970.8    443.5    8.0 
(-) Costs and expenses    1,138.1    1,146.9    8.8    0.8    3,723.3    3,894.4    171.1    4.6 
(=) Earnings before financial expenses (EBIT*)   340.3    419.7    79.4    23.3    1,804.0    2,076.4    272.4    15.1 
(+) Depreciation and amortization    192.8    153.8    (39.0)   (20.2)   642.2    622.5    (19.7)   (3.1)
(=) EBITDA**    533.1    573.5    40.4    7.6    2,446.2    2,698.9    252.7    10.3 
(%) EBITDA margin    36.1    36.6            44.3    45.2         
 
Net income    80.0    78.1       (1.9)   (2.4)   778.9    1,048.7    269.8    34.6 
 
Earnings per share (R$)***    0.35    0.34            3.42    4.60         
 

(*) Earnings before interest and taxes
(**) Earnings before interest, taxes, depreciation and amortization
(***) Earnings per share include the reverse split held on June 2007 for all analyzed periods in order to enable comparison

In 2007, net operating revenue totaled R$ 6.0 billion, an 8.0% increase compared to 2006. Costs and expenses stood at R$ 3.9 billion, 4.6% higher than in 2006. EBITDA moved up 10.3% to R$ 2.7 billion in 2007 from R$ 2.4 billion in 2006, as revenues outgrew costs.

Earnings before financial expenses (EBIT) increased by 15.1% to R$ 2.1 billion in 2007 from R$ 1.8 billion in 2006. Net income reached R$ 1.05 billion, 34.6% higher than the R$ 778.9 million recorded in 2006. In 4Q07, net income totaled R$ 78.1 million, down 2.4% compared to the same period of the previous year.

2. Gross operating revenue

In 2007, gross operating revenue grew R$ 464.2 million, or 7.8%, from R$ 6.0 billion in 2006 to R$ 6.4 billion in 2007. The main reasons for this increase were:

  • The 5.7% impact derived from the 6.7% tariff adjustment in 2006, with a 4.7% impact in 2007, and the 4.1% tariff adjustment in September 2007, with a 1% impact in the period; and
  • The 3.1% increase in billed volume.

In 4Q07 gross operating revenue totaled R$ 1.7 billion, R$ 89.9 million or 5.6% higher than in the same period of 2006.

  • Billed volume grew 3.3% in average when compared to the same period of 2006 and tariff adjustment had a 2.9% impact in 2007.

3. Billed volume

The following tables show billed water and sewage volume per customer category and region in 4Q06, 4Q07, 2006 and 2007.

It is worth pointing out the increase in sewage volume treated as a result of the Company’s actions with its current water customers in the wholesale market and of the increase in the volume of collected sewage in the retail market.

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BILLED WATER AND SEWAGE VOLUME(1) PER CUSTOMER CATEGORY - million m3

 
    Water    Sewage    Water + Sewage 
 
    4Q06    4Q07    %    4Q06    4Q07    %    4Q06    4Q07    % 
 
Residential    331.5    340.4    2.7    262.5    271.7    3.5    594.0    612.1       3.0 
Commercial    37.2    38.3    3.0    34.2    35.1    2.6    71.4    73.4       2.8 
Industrial    8.6    9.1    5.8    8.1    8.2    1.2    16.7    17.3       3.6 
Public    11.7    11.9    1.7    9.4    9.5    1.1    21.1    21.4       1.4 
 
Total retail    389.0    399.7    2.8    314.2    324.5    3.3    703.2    724.2       3.0 
 
Wholesale    67.1    70.7    5.4    5.3    6.4      72.4    77.1       6.5 
 
Total    456.1    470.4    3.1    319.5    330.9    3.6    775.6    801.3       3.3 
 
    2006    2007    %    2006    2007    %    2006    2007     % 
 
Residential    1,314.7    1,338.8    1.8    1,035.6    1,065.1    2.8    2,350.3    2,403.9     2.3 
Commercial    148.0    151.2    2.2    135.3    138.4    2.3    283.3    289.6     2.2 
Industrial    34.4    35.3    2.6    32.4    33.3    2.8    66.8    68.6     2.7 
Public    46.7    47.4    1.5    37.4    37.8    1.1    84.1    85.2     1.3 
 
Total retail    1,543.8    1,572.7    1.9    1,240.7    1,274.6    2.7    2,784.5    2,847.3     2.3 
 
Wholesale    263.4    274.3    4.1    5.3    24.9      268.7    299.2    11.4 
 
Total    1,807.2    1,847.0    2.2    1,246.0    1,299.5    4.3    3,053.2    3,146.5     3.1 
 
(1) Non-audited

BILLED WATER AND SEWAGE VOLUME(1) PER REGION - million m3

 
    Water    Sewage    Water + Sewage 
 
    4Q06    4Q07    %    4Q06    4Q07    %    4Q06    4Q07    % 
 
Metropolitan    260.5    265.5    1.9    214.3    219.6    2.5    474.8    485.1       2.2 
Regional (2)   128.5    134.2    4.4    99.9    104.9    5.0    228.4    239.1       4.7 
 
Total retail    389.0    399.7    2.8    314.2    324.5    3.3    703.2    724.2       3.0 
 
Wholesale    67.1    70.7    5.4    5.3    6.4      72.4    77.1       6.5 
 
Total    456.1    470.4    3.1    319.5    330.9    3.6    775.6    801.3       3.3 
 
    2006    2007    %    2006    2007    %    2006    2007     % 
 
Metropolitan    1,030.8    1,046.8    1.6    843.5    866.0    2.7    1,874.3    1,912.8       2.1 
Regional (2)   513.0    525.9    2.5    397.2    408.6    2.9    910.2    934.5     2.7 
 
Total retail    1,543.8    1,572.7    1.9    1,240.7    1,274.6    2.7    2,784.5    2,847.3     2.3 
 
Wholesale    263.4    274.3    4.1    5.3    24.9      268.7    299.2    11.4 
 
Total    1,807.2    1,847.0    2.2    1,246.0    1,299.5    4.3    3,053.2    3,146.5     3.1 
 
(1) Non-audited
(2) Including coastal and interior regions

4. Costs, administrative and selling expenses

In 2007, costs, administrative and selling expenses grew by R$ 171.1 million. Costs and expenses as a percentage of net revenue dropped from 67.4% in 2006 to 65.2% in 2007.

In 4Q07, there was a R$ 8.8 million or 0.8% increase over the same period of the year before.

                            R$ million 
 
    4Q06    4Q07     Chg.    %    2006    2007    Chg.    % 
 
Payroll and benefits    339.2    321.8    (17.4)   (5.1)   1,258.4    1,265.7    7.3    0.6 
Supplies    39.0    33.6    (5.4)   (13.8)   127.7    131.8    4.1    3.2 
Treatment supplies    20.7    21.4    0.7    3.4    104.5    112.3    7.8    7.5 
Third-party services    153.5    168.7    15.2    9.9    486.3    539.0    52.7    10.8 
Electric power    118.5    113.8    (4.7)   (4.0)   448.8    474.5    25.7    5.7 
General expenses    91.6    223.6    132.0    144.1    210.1    381.7    171.6    81.7 
Depreciation and amortization    192.8    153.8    (39.0)   (20.2)   642.2    622.5    (19.7)   (3.1)
Credit write-offs    173.6    92.0    (81.6)   (47.0)   411.9    323.3    (88.6)   (21.5)
Tax expenses    9.2    18.2    9.0    97.8    33.4    43.6    10.2    30.5 
 
Costs, administrative and selling expenses    1,138.1    1,146.9    8.8    0.8    3,723.3    3,894.4    171.1    4.6 
 
% over net revenue    77%    73%            67%    65%         
 

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4.1. Payroll and benefits

In 2007 payroll and benefits grew R$ 7.3 million or 0.6%, from R$ 1,258.4 million to R$ 1,265.7 million due to the following factors:

  • Wage increase of 3.37% (IPC-FIPE) as of May 2007; and
  • Provision for pension plan obligations, as determined by CVM Resolution 371, R$ 52.5 million higher, mainly as a result of the adoption of a new mortality rate table.

These expenses were offset by the following factors, which occurred in 2006, but not in 2007:

  • Performance evaluation with the payment of bonus in the amount of R$ 28.7 million in 2006;
  • Profit Sharing Program, considering the adjustment between January and December 2006, R$ 28.2 million lower in 2007; and
  • Voluntary Lay-off Program, with the adhesion of 398 employees in 2006, totaling an expense of R$ 11.6 million.

The Company expanded the services rendered and increased productivity. The number of connections per employee improved by 3.5%, from 684 in 2006 to 708 in 2007.

In 4Q07, payroll and benefits dropped by R$ 17.4 million or 5.1% due to the factors mentioned above.

4.2. Supplies

In 2007, supplies grew by R$ 4.1 million or 3.2%, from R$ 127.7 million to R$ 131.8 million, mainly due to:

  • Network and residential water and sewage connection maintenance, mainly concentrated in the São Paulo Metropolitan Region, with greater allocation of funds to the loss reduction program and the recovery of the Global Sourcing program, which generated an increase of R$ 4.8 million in this expense;
  • Electric and mechanical system maintenance at the pumping and sewage treatment stations in the amount of R$ 1.2 million; and
  • Security supplies, protection and uniforms, resulting in the granting of the OHSAS 18001 certificate (international certificate in health and safety management) in the amount of R$ 1.1 million.

These expenses were offset by the decrease in fuel and lubricants during 2007 in the amount of R$ 4.2 million, from R$ 26.7 million in 2006 to R$ 22.5 million in 2007 due to improved supply management and the 9.4% decrease in ethanol average prices.

In 4Q07, supplies fell by R$ 5.4 million over the same period of 2006.

4.3. Treatment supplies

In 2007, expenses with chemical products rose R$ 7.8 million or 7.5% on 2006, moving from R$ 104.5 million to R$ 112.3 million, due to the proliferation of algae in the Cantareira System, which demanded a larger use of cooper sulfate at the reservoirs and the increase in the consumption of chemical products at the Guaraú Water Treatment Station.

4.4. Third-party services

In 2007 this item grew by R$ 52.7 million or 10.8%, from R$ 486.3 million to R$ 539.0 million. The main reasons for this increase were:

  • Network and residential water and sewage connection maintenance, paving and replacing pavement due to the execution of the loss control program, in the amount of R$ 20.3 million;
  • Preventive and corrective maintenance at the water and sewage treatment stations in the amount of R$ 17.9 million;
  • Contract updates and hiring of surveillance, with electronic monitoring, in the amount of R$ 4.7 million;

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  • Publicity and advertisement with the launching of campaigns focused at the social environmental policy, in the amount of R$ 4.5 million;
  • Hydrometer reading and bill delivery in the amount of R$ 4.3 million due to the expansion of the TACE (external technical sales service) to special clients and the increase in the number of connections;
  • New hiring for charging of overdue bill collection in the amount of R$ 2.2 million; and
  • Expenses with the maintenance and adjustment of the Call Center facility for the São Paulo Metropolitan Region, in the amount of R$ 2.1 million.

In 2007, third-party expenses fell by R$ 10.6 million due to the change in the booking of expenses related to the software license agreements over a period of 36 months.

In the 4Q07, third-party expenses rose by R$ 15.2 million or 9.9% compared to the same period of 2006.

4.5. Electric power

Electric power increased by R$ 25.7 million or 5.7%, from R$ 448.8 million to R$ 474.5 million.

This increase was due to the 6.5% weighted average tariff increase between the captive and free markets and to the 0.8% drop resulting from the energy efficiency program, the optimization of supply agreements with the electric power concessionaires and the decrease in produced volume of water.

In the 4Q07 this item dropped R$ 4.7 million due to the factors mentioned above.

4.6. General expenses

In 2007 general expenses moved up R$ 171.6 million or 81.7%, from R$ 210.1 million to R$ 381.7 million, due to:

  • New provisions for lawsuits mainly related to clients in the amount of R$163.3 million. This increase was due to research, considering the history of these lawsuits in order to make a better outlook for future disbursement; and
  • The R$ 5.9 million increase in charges for the use of water in the Piracicaba, Capivari, Jundiaí, Jaguari, Atibaia and Paraíba do Sul river basins, of which R$ 1.8 million was paid to the ANA – Agência Nacional de Águas (National Water Agency) and R$ 4.2 million paid to Secretaria do Meio-Ambiente (Environmental Secretariat) as of September 2007.

The payments are made according to the following progressive table:

 
Year    State    Federal 
 
2006      60% 
 
2007    60%    75% 
 
2008    75%    100% 
 
2009    100%    100% 
 

In the 4Q07 the R$ 132.0 million increase was mainly due to provision for contingencies.

4.7. Depreciation and amortization

Depreciation and amortization dropped by R$ 19.7 million or 3.1%, from R$ 642.2 million to R$ 622.5 million, regarding the transfer of properties, plants and equipment to the fixed assets in operation during 2007, proportionally lower than in 2006.

4.8. Credit write-offs

In 2007, credit write-offs declined R$ 88.6 million or 21.5%, from R$ 411.9 million to R$ 323.3 million, mainly due to:

  • Adjustments in the final balance of “Revenues to be Identified” in the amount of R$ 93.8 million in 2006; and
  • Credit recovery in the amount of R$ 7.1 million.

Page 5 of 12


4.9. Tax expenses

In 2007 tax expenses grew by 30.5%, corresponding to an increase of R$ 10.2 million due to the end of Sabesp’s exemption from the Municipal Real Estate Tax (IPTU) in the municipality of São Paulo.

The R$ 9.0 million increase in tax expenses in 4Q07 was a result of the payment of the IPTU tax as mentioned above.

5. Financial expenses and revenues

5.1. Financial expenses

In 2007, financial expenses grew by R$ 84.7 million, or 12.3%, as follows:

                R$ million 
 
    2006    2007    Var.    % 
 
Financial expenses                 
   Interest and charges on domestic loans and financing    517.6    447.0    (70.6)   (13.6)
   Interest and charges on international loans and financing    121.2    66.3    (54.9)   (45.3)
   Interest rate over foreign remittance    12.6    6.4       (6.2)   (49.2)
   Other financial expenses    38.6    69.3    30.7    79.5 
   Provisions    (2.7)   183.0    185.7   
 
Total financial expenses    687.3    772.0    84.7    12.3 
 
Financial revenues    97.5    98.1    0.6    0.6 
 
Financial expenses net of revenues    589.8    673.9    84.1    14.3 
 

The highlights for domestic financing were:

  • The R$ 70.6 million drop in the amount paid regarding interest for domestic financing due to the prepayment in April 2006 of the 1st series of the 5th debenture, the settlement in March 2007 of the 2nd series of the 5th debenture, the settlement in September 2007 of the 1st series of the 6th debenture and the amortization of the 4th debenture throughout 2006 in December. The settlement in April 2006 of the 1st series of the 5th debenture with funds raised from the FIDC enabled a drop from 1.1% p.a. to 0.7% p.a. in interest rate.

The highlights for international financing were:

  • The R$ 18.3 million decline in interest on Eurobonds due to the prepayment of part of the 2008 Eurobonds in November 2006. With the new issuance, Eurobonds 2016, interest rates dropped from 12% p.a. to 7.5% p.a.;
  • Drop on interest in international financing of R$ 5.2 million, due to settlement of the principal amount of the agreement with IDB (Inter-American Development Bank) in January, June, July and December 2007 and with the World Bank in April 2007; and
  • Non-recurring expenses in 2007 with the payment of premiums for the adhesion to the partial prepayment of the 2008 Eurobonds in the amount of R$ 31.4 million.

Regarding other financial expenses, which increased by R$ 30.7 million, the payment of interest and lawsuits mentioned in the general expenses section in the amount of R$ 47.8 million stands out, partially offset by the decrease in the long term interest rate (TJLP) in the PAES (Special Installment Program) in the amount of R$ 4.4 million.

In 2007 the Company recorded provisions of R$ 183.0 million for the financial expenses regarding the lawsuits mentioned at the general expenses section.

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6. Foreign exchange and indexation

6.1. Variation on liability

The net effect of the foreign exchange and indexation was R$ 79.0 million positive in 2007 versus R$ 1.5 million negative in 2006 due to:

  • The higher appreciation of the Brazilian Real in 2007 (17.2%), versus 2006 (8.7%), resulting in a R$ 92.2 million variation; and
  • The increase in the General Market Price Index (IGPM) in 2007 (from 3.9% in 2006 to 7.8% in 2007) generating a monetary variation of R$ 11.7 million.
                R$ million 
 
    2006    2007    Var.    % 
 
Monetary variation over loans and financing    97.6     109.3    11.7    12.0 
Currency exchange variation over loans and financing    (96.1)   (188.3)   (92.2)   95.9 
 
Variation on liabilities    1.5    (79.0)   (80.5)   - 
 

6.2. Variation on assets

Foreign exchange and indexation increased by R$ 6.0 million or 21.4% from R$ 28.0 million to R$ 34.0 million in 2007, mainly due to agreements on debt rescheduling

7. Non-operating result

Non-operating result grew R$ 15.7 million or 30.8%, from R$ 50.9 million expense to R$ 35.2 million in 2007, due to:

7.1. Non-operating revenues

Non-operating revenues moved up R$ 42.5 million, from R$ 10.1 million to R$ 52.6 million in 2007, mainly due to the auction of unusable materials, the booking of reimbursement payables overdue for more than 5 years and the sale of electric power leftovers.

7.2. Non-operating expenses

Non-operating expenses climbed R$ 22.6 million or 38.5% due to the write-off of discontinued properties, plants and equipments and obsolete projects.

8. Operating indicators

The following table shows the continuous expansion of the services rendered by the Company.

 
Operating indicators*    2006    2007    % 
 
Water connections (1)   6.609    6.767    2,4 
Sewage connections (1)   5.002    5.167    3,3 
Population directly served - water (2)   22.700    22.959    1,1 
Population directly served - sewage (2)   18.519    18.881    2,0 
Number of employees    16.978    16.850    (0,8)
Number of water and sewage connections per employee    684    708    3,5 
Water volume produced    2.887    2.874    (0,5)
Water losses (%)   31,9    29,5    (7,5)
 

(1) In thousand units at the end of the period.
(2) In thousand inhabitants at the end of the period, not including wholesale
* Not-audited

Page 7 of 12


9. Loans and financing

In 2007 Sabesp amortized R$ 734.8 million of its debt and contracted new debt in the amount of R$ 222.5 million. The net balance was a R$ 512.3 million drop in total indebtedness. As a consequence, the total debt to EBITDA ratio recorded an expressive improvement, from 2.6x in 2006 to 2.1x in 2007. Foreign exchange variation dropped from 23.3% to 21.9% . Net debt/EBITDA improved from 2,45x to 1,93x. The net debt to shareholders’ equity moved from 66.5% to 53.4% .

                            R$ million 
 
INSTITUTION    2008    2009    2010    2011    2012    2013    2014 and 
onwards 
   Total 
 
Local market                                 
Banco do Brasil    238.2    259.2    282.2    307.1    334.3    363.9    95.9    1,880.8 
Caixa Econômica Federal    58.3    61.9    66.4    71.9    77.7    77.8    135.2    549.2 
Debentures      768.7    321.3    387.4          1,477.4 
FIDC - SABESP I    55.5    55.6    55.6    13.9          180.6 
BNDES    41.9    41.9    41.9    41.9    36.0    4.0      207.6 
Others    3.1    6.9    6.2    5.7          21.9 
Interest and charges    93.4    14.2    14.2    3.6          125.4 
 
Local market total    490.4    1,208.4    787.8    831.5    448.0    445.7    231.1    4,442.9 
International market                                 
IDB    64.8    64.7    64.8    64.8    64.8    64.8    376.7    765.4 
Eurobonds    173.7              248.0    421.7 
JBIC          1.1    2.2    2.2    36.5    42.0 
Interest and charges    13.2                13.2 
International market total    251.7    64.7    64.8    65.9    67.0    67.0    661.2    1,242.3 
Total    742.1    1,273.1    852.6    897.4    515.0    512.7    892.3    5,685.2 
 


Page 8 of 12


10. Conference calls

In Portuguese    In English 
April 2, 2008    April 2, 2008 
1:00 PM (US EST) / 2:00 PM (Brasília Time)   3:30 PM (US EST) / 4:30 PM (Brasília Time)
Dial in access: 55 11 2188-0188    Dial in access: 1 973 935-8893 
Conference ID: Sabesp    Conference ID: 39746596 
 
Replay – available until 4/8/2008    Replay – available until 4/8/2008 
Dial in access: 55 11 2188-0188    Dial in access: 1 706 645-9291 
Replay ID: Sabesp    Replay ID: 39746596 

Live webcast at www.sabesp.com.br

For more information, please contact:

Mario Arruda Sampaio.
Phone(55 11) 3388-8664

E-mail: maasampaio@sabesp.com.br

Angela Beatriz Airoldi
Phone.(55 11) 3388-8793
E-mail:
abairoldi@sabesp.com.br

Statements contained in this press release may contain information that is forward-looking and reflects management's current view and estimates of future economic circumstances, industry conditions, SABESP performance, and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this press release that do not describe historical facts, such as statements regarding the declaration or payment of dividends, the direction of future operations, the implementation of principal operating and financing strategies and capital expenditure plans, the factors or trends affecting financial condition, liquidity or results of operations are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. There is no guarantee that these results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

Page 9 of 12


Income Statement

Corporate Law Method (Law No. 6,404/76)       R$ thousand 
 
    2007    2006    % 
 
Gross Revenue from Sales and Services    6,448,211    5,984,012    7.8 
Water Supply - Retail    3,325,826    3,093,121    7.5 
Water Supply - Wholesale    291,705    265,298    10.0 
Sewage Collection and Treatment    2,724,400    2,532,666    7.6 
Sewage Collection and Treatment - Wholesale    8,002         - 
Other Services    98,278    92,927    5.8 
             
Taxes on Sales and Services - COFINS and PASEP    (477,369)   (456,679)   4.5 
             
Net Revenue from Sales and Services    5,970,842    5,527,333    8.0 
             
Costs of Sales and Services    (2,695,696)   (2,616,764)   3.0 
             
Gross Profit    3,275,146    2,910,569    12.5 
             
Selling Expenses    (639,552)   (719,185)   (11.1)
Administrative Expenses    (559,190)   (387,407)   44.3 
             
Operating Income before Financial Expenses and    2,076,404    1,803,977    15.1 
Foreing Exchange gain (loss), net             
             
Financial Income and Expenses, net    (748,995)   (658,863)   13.7 
Foreing Exchange gain (loss), net    188,038    95,598    96.7 
             
Operating Income    1,515,447    1,240,712    22.1 
             
Non-Operating Expenses (Income)            
             
Non-Operating Income    46,115    7,810    490.5 
Non-Operating Expense    (81,291)   (58,717)   38.4 
             
Income (loss) before Taxes on Income    1,480,271    1,189,805    24.4 
             
Income and Social Contribution Taxes             
             
Current Income Tax/Social Contribution    (543,345)   (383,123)   41.8 
Deferred Income Tax/Social Contribution    111,777    7,345    1,421.8 
             
Income (loss) before Extraordinary Item    1,048,703    814,027    28.8 
             
Extraordinary item, net of income taxes and social contribution      (35,122)   (100.0)
             
Net Income (loss)   1,048,703    778,905    34.6 
             
Registered common shares (thousand of shares)   227,836    28,479,577    - 
Earnings per shares R$ (per thousand shares in 2006)   4.60    27.35    - 
             
Depreciation and Amortization    (622,549)   (642,171)   (3.1)
EBITDA    2,698,953    2,446,148    10.3 
    % over net revenue 
  45.2%    44.3%     
 

Page 10 of 12


Balance Sheet

Brazilian Corporate Law    R$ thousand 
 
ASSETS    12/31/2007    12/31/2006 
 
 Cash and Cash Equivalents    464,997    328,206 
 Accounts Receivable, net    1,207,885    1,111,289 
 Accounts Receivable from Shareholders    338,506    367,864 
 Inventory    53,141    48,889 
 Taxes and contributions    9,414    31,582 
 Other Receivables    41,782    24,124 
 Deferred income tax and social contribution    108,792    7,078 
     
Total Current Assets    2,224,517    1,919,032 
 
Long Term Assets:         
 Accounts Receivable, net    278,787    296,562 
 Accounts Receivable from Shareholders    986,988    863,467 
 Indemnities Receivable    148,794    148,794 
 Judicial Deposits    19,806    33,835 
 Taxes and contributions    357,226    342,654 
 Other Receivables    75,202    52,238 
     
    1,866,803    1,737,550 
Permanent Assets:         
 Investments    720    720 
 Permanent Assets    14,060,073    13,837,498 
 Intangible Assets    507,789    495,118 
 Deferred Assets    3,474    10,035 
     
    14,572,056    14,343,371 
Total Permanent Assets    16,438,859    16,080,921 
     
 
     
Total Assets    18,663,376    17,999,953 
     
 
 
LIABILITIES    12/31/2007    12/31/2006 
 
 Suppliers and Constructors    165,267    144,167 
 Loans and Financing    742,114    852,475 
 Salaries and Payroll Charges    166,797    177,705 
 Taxes and contributions payable    127,735    105,552 
 Taxes and contributions    75,249    76,359 
 Interest on Own Capital Payable    680,339    511,519 
 Provision for Judicial Pendencies    290,172    2,294 
 Services Payable    156,987    152,953 
 Other Payables    50,077    78,912 
     
Total Current Liabilities    2,454,737    2,101,936 
 
Long Term Liabilities:         
 Loans and Financing    4,943,121    5,474,254 
 Taxes and contributions payable    197,635    230,440 
 Deferred Taxes and Contributions    159,865    146,901 
 Provision for Contingencies    655,084    655,258 
 Pension Fund Obligations    365,234    321,212 
 Other Payables    103,694    51,470 
     
Long Term Liabilities    6,424,633    6,879,535 
 
 Capital Stock    3,403,688    3,403,688 
   Capital Reserves    124,255    106,690 
   Revaluation Reserves    2,339,829    2,427,499 
   Profit Reserves    3,916,234    3,080,605 
   Accrued income     
     
Shareholder's Equity    9,784,006    9,018,482 
 
     
Total Liabilities and Shareholder's Equity    18,663,376    17,999,953 
     
         
         
 

Page 11 of 12


Cash Flow

Brazilian Corporate Law    R$ thousand 
 
Description   
Jan-Dec/07 
Jan-Dec/06 
 
Cash flow from operating activities         
Net income for the period    1,048,703    778,905 
Adjustments for reconciliation of net income         
Deferred income tax and social contribution    (104,432)   (8,473)
Provisions for contingencies    477,722    144,480 
Reversion of provision for losses    (945)   (8,819)
Other provisions    155    7,504 
Liabilities related to pension plans    59,931    60,070 
Loss in the write-off of property, plant and equipment    68,349    47,807 
Deferred asset write-offs    1,276    5,195 
Investments write-offs      20 
Gain with the sale of investments    219    (1,294)
Depreciation and Amortization    622,549    642,171 
Interest calculated on loans and financing payable    519,672    619,909 
Foreign exchange loss on loans and financing    (87,101)   (9,477)
Monetary variation on interest on own capital    4,462   
Passive monetary exchange variation and interest    12,218    17,646 
Active monetary exchange variation and interest    (21,121)   (16,549)
Provisions for bad debt    323,339    411,918 
     
Adjusted Net Income    2,924,996    2,691,013 
     
(Increase) decrease in assets:         
Clients    (400,944)   (458,824)
Accounts receivable from shareholders    (81,741)   (151,343)
Inventories    (3,307)   (12,851)
Recoverable Taxes    22,168    (30,729)
Other accounts receivable    (22,877)   (14,671)
Judicial deposits    9,706    (21,012)
Increase (decrease) in liabilities:         
Accounts payable to suppliers and contractors    (14,055)   50,176 
Salaries and payroll charges    (10,908)   60,416 
Taxes and contributions    (22,840)   (43,899)
Services payable    4,034    45,293 
Other accounts payable    (27,055)   2,472 
Contingencies    (145,668)   (79,801)
Pension plan    (15,909)   (15,416)
 
     
Net cash from operating activities    2,215,600    2,020,824 
     
 
Cash flow from investing activities:         
Acquisition of property, plant and equipment    (848,878)   (842,454)
Increase in intangible assets    (32,818)   (12,630)
Sale of property, plant and equipment      7,837 
Increase in Deferred Assets      (2,789)
 
     
Net cash used in investing activities    (881,696)   (850,036)
     
Cash flow from financing activities         
Loans and Financing - long term         
Funding    222,474    706,774 
Payments    (1,283,201)   (1,660,482)
Interest on own capital payment    (136,386)   (169,047)
     
Net cash used in financing activities    (1,197,113)   (1,122,755)
     
 
Net increase (decrease) in cash equivalents    136,791    48,033 
 
Cash and cash equivalents at the beginning of the period    328,206    280,173 
Cash and cash equivalents at the end of the period    464,997    328,206 
     
Change in Cash    136,791    48,033 
     
 
Additional information on cash flow:         
Interest and taxes over loans and financing    548,417    637,989 
Capitalization of interest and financial charges    (13,338)   5,784 
Payable income tax and social contribution    499,318    404,272 
Property, plant and equip. received as donations and/or paid in stocks    17,565    27,870 
COFINS and PASEP taxes payable    472,060    440,883 
Judicial agreements    34,071   
National Water Agency Program    16,219   
Acquisition of fixed assest payable    35,154    16,210 
         
 

Page 12 of 12


 
SIGNATURE  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city São Paulo, Brazil.

Date: April 9, 2008

 
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
By:
/S/ Rui de Britto Álvares Affonso 

 
Name: Rui de Britto Álvares Affonso
Title: Chief Financial Officer and Investor Relations Officer

 

 

 

 
FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.