Sabesp 2Q26 Earnings: Adjusted Net Income Falls 41% on Higher Costs and Debt

summarizeSummary

Sabesp reported a 41.2% drop in adjusted net income for 2Q26, driven by higher operating costs and a larger debt burden, despite revenue growth.

check_boxKey Events · Earnings and Guidance · SBS

• Adjusted Net Income Falls 41.2%

  Adjusted net income was R$1,150 million in 2Q26, down from R$1,956 million in 2Q25, driven by higher costs and financial expenses.

• Operating Costs Surge 24.5%

  Costs and expenses rose to R$2,528 million, with services up 39% due to customer service investments, general expenses up 977% due to prior-year legal wins, and treatment supplies up 97% on inflation.

• Net Debt Jumps to R$34 Billion

  Net debt increased from R$23 billion in 2Q25 to R$34 billion in 2Q26, leading to a R$958 million increase in net financial result.

• Capex Remains Elevated

  Capex totaled R$3.7 billion in 2Q26, up 3.6% y/y, with 1H26 investments reaching R$7.5 billion, up 15.6% y/y, supporting universalization projects.

auto_awesomeAnalysis · SBS · Energy & Transportation

Sabesp's second-quarter results show a sharp decline in profitability, with adjusted net income down 41.2% year-over-year to R$1,150 million. The drop was driven by a 24.5% increase in operating costs and expenses, reflecting investments in customer service, inflationary pressures on treatment supplies, and the absence of favorable legal rulings that boosted the prior-year period. Net debt also rose significantly to R$34 billion from R$23 billion, increasing financial expenses. While revenue grew 6.7% on an adjusted basis, the cost pressures and higher funding costs outweighed the gains. The company continues to invest heavily in its universalization agenda, with capex up 3.6% to R$3.7 billion in the quarter, but the near-term earnings impact is clear.