By Brazil Stock Guide – Iguá Saneamento reported a sharp increase in first-quarter revenue and operating earnings, helped by the ramp-up of new concessions in Rio de Janeiro and Sergipe, even as high debt continued to weigh on the company’s bottom line.
Adjusted net revenue rose 47.5% from a year earlier to R$823.7 million in the first quarter of 2026. Adjusted EBITDA increased 48.6% to R$374.1 million, with the adjusted EBITDA margin reaching 45.4%, broadly stable from a year earlier.
The company said the performance reflected the expansion of Iguá Rio de Janeiro and the start of full operations at Iguá Sergipe, which became one of the main drivers of growth. Total water and sewage connections rose 75.4% to 2.4 million, while billed volume increased 54.6%.
Iguá also reported operational gains. Its water billing loss ratio fell to 45.5%, down from 47.6% a year earlier, helped by network segmentation, infrastructure modernization, inspections and anti-fraud measures. The company also posted a negative delinquency ratio of 1.0%, reflecting provision reversals and stronger credit recovery.
Still, the sanitation company remained loss-making. Net loss narrowed to R$149.7 million from R$161.1 million a year earlier, as financial expenses continued to pressure results. Net financial expenses rose 16.3% to R$476.5 million, mainly due to debt tied to the Rio de Janeiro and Sergipe concessions.
Gross debt reached R$13.2 billion, up 18.1% from a year earlier, while net debt rose 22.2% to R$12.3 billion. Consolidated leverage declined to 9.60 times adjusted EBITDA over the last 12 months, from 11.79 times a year earlier, but remained elevated. Excluding Rio and Sergipe, leverage would have been 3.49 times, highlighting the difference between mature concessions and assets still in ramp-up.
Capital expenditures totaled R$185.1 million in the quarter. Iguá said investments remained focused on expansion, modernization and efficiency projects across its concessions, including works at the Barra da Tijuca and Jacarepaguá lagoon complex, sewage systems in Rio de Janeiro, emergency water projects in Sergipe, and sanitation expansion in Cuiabá and Paranaguá.
The first-quarter figures show a company gaining scale in Brazil’s sanitation market, but still carrying the financial burden of building that platform. For Iguá, the next test is whether revenue growth and operating efficiency can translate into faster deleveraging.