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Actionable news in SBS: COMPANHIA DE SANEAMENTO B SICO DO ESTADO DE SAO PAULO-SABESP ADS'S,

Sabesp Keeps Getting Dragged Down by Brazilian Currency Woes

Image source: Sabesp.

On March 25, Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) (NYSE:SBS) released its quarterly earnings. Like in preceding quarters, Sabesp has been slowly improving its operations through better cost controls and some strong rate increases as water has been a rather precious commodity in the drought stricken Sao Paulo region of Brazil for some time. At the same time, the same things that have been dragging the company down -- drought and a devalued local currency -- have continued to weigh on results. Here's a quick snapshot of the company's results as well as some of the major highlights for the quarter that will help put 2016 into perspective.

Sabesp's results: The raw numbers

Results (in millions, except per-share data)* Q4 2015 Q4 2014 Change
Revenue $934.7 $824.6 13.3%
Adjusted EBITDA $277.6 $144.6 91.9%
Net income $133.7 $9.1 1,367%
Earnings per share $0.19 $0.014

*All financial results converted to USD at exchange rate $1 BRL = $0.29 USD
Data source: Sabesp quarterly earnings release.

Not only are this quarter's results markedly better than the same time lats year, but they were also a significant improvement from the last sequential quarter as well. Looking back over the past several quarters of Sabesp's results, though, one thing that sticks out is the company's results are pretty lumpy from quarter to quarter. So here's a quick look at the numbers for fiscal year 2015 to give a little more clarity.

Results (in millions, except per-share data)* 2015 2014 Change
Revenue $3,396.4 $3,251.8 4.1%
Adjusted EBITDA $1,152.5 $846.5 36.2%
Net income $155.5 $261.9 (40.6%)
Earnings per share $0.23 $0.38

*All financial results converted to USD at exchange rate $1 BRL = $0.29 USD
Data source: Sabesp quarterly earnings release.

The thing that really stands out in the company's results is that despite posting better...


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