Sabesp Rises Most in Six Weeks on Earnings: Sao Paulo Mover
Cia. de Saneamento Basico do Estado de Sao Paulo, Latin America’s largest publicly traded water utility, rose the most in six weeks after reporting higher-than- expected earnings.
Sabesp, as the company is known, increased 2.6 percent to 91.23 reais at the close in Sao Paulo, the most since Feb. 4.
The company reported last night adjusted earnings before interest, taxes, depreciation, and amortization of 1.02 billion reais ($506.6 million) for the fourth quarter, 5 percent higher than what analysts forecast, according to information compiled by Bloomberg.
“The company’s results were good and the shares are probably reflecting this,” and to a lesser extent the rate hike, Vicente Koki, an analyst at Portuguese lender Caixa Geral de Depositos SA’s Sao Paulo office, said today in a telephone interview.
Arsesp, the energy and sanitation regulator for Sao Paulo state, approved an increase in the rate Sabesp charges for water of 2.4 percent, up from a proposal of 1.9 percent in November.
The increase in water tariff will start April 22, Agencia Reguladora de Saneamento e Energia de Sao Paulo, as the regulator is officially known, said in a statement today. It may be adjusted in August after Arsesp concludes a study on the value of the company’s assets.
Sabesp, based in Sao Paulo, is expected to invest 12 billion reais through 2016 to expand infrastructure and boost efficiency, according to the statement. It delivers water and treats sewage in 363 cities in the state of Sao Paulo.
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