Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp (SBS)

SBS » Topics » 1. EBITDA margin recovery

This excerpt taken from the SBS 6-K filed Mar 30, 2006.

1. EBITDA margin recovery

                       
(R$ million)
 
4Q04 
4Q05 
Chg. 
% 
2004 
2005 
Chg. 
% 
 
(+) Gross Operating Revenue    1,276.7    1,451.1    174.4    13.7    4,642.5    5,356.4    713.9    15.4 
(-) COFINS and PASEP    92.8    110.3    17.5    18.9    245.4    403.0    157.6    64.2 
(+) Net Operating Revenue    1,183.9    1,340.8    156.9    13.3    4,397.1    4,953.4    556.3    12.7 
(-) Costs and expenses    881.1    876.3    (4.8)   (0.5)   3,069.5    3,263.8    194.3    6.3 
(=) Earnings before financial expenses (EBIT*)   302.8    464.5    161.7    53.4    1,327.6    1,689.6    362.0    27.3 
(+) Depreciation and amortization    153.9    153.7    (0.2)   (0.1)   598.9    596.0    (2.9)   (0.5)
(=) EBITDA**    456.7    618.2    161.5    35.4    1,926.5    2,285.6    359.1    18.6 
(%) EBITDA margin    38.6    46.1            43.8    46.1         
 
    Earnings per 1,000 shares (R$)   8.26    6.58            18.01    30.40         
    ROE (%)   3.0    2.2            6.5    10.2         
    ROA (%)   1.8    2.7            7.9    9.7         
 
(*) Earnings before interest and taxes
(**) Earnings before interest, taxes, depreciation and amortization

EBITDA in 2005 totaled R$ 2,285.6 million, R$ 359.1 million more than in 2004, thanks to expressive growth in revenues versus costs.

Despite the substantial increase (64.2%) in COFINS/PASEP expenses, due to changes in the duty’s rate and calculation basis as of September 2004, annual net income jumped by 68.7% from R$ 513.0 million, in 2004, to R$ 865.6 million. Part of this increase was due to the 11.8% appreciation of the Real in 2005, versus 8.1% the year before, but the hefty 66.2% rise in net income from operating results greatly contributed to this outcome.

ROE (return on equity) increased from 6.5% to 10.2%, while ROA (return on assets) climbed from 7.9% to 9.7% . 4Q05 EBITDA stood at R$ 618.2 million, 35.4% up year-on-year, while the corresponding EBITDA margin increased from 38.6% to 46.1% .


Fourth Quarter 2005 Results 
March 24, 2006 
Page 3  of 12 

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