By Brazil Stock Guide – Companhia de Saneamento do Paraná – Sanepar (SAPR3), (SAPR4) and (SAPR11) reported a 12.5% year-on-year decline in net income for the fourth quarter of 2025, as operating costs and expenses rose at a faster pace than revenue. Quarterly net profit totaled BRL 361.4 million, compared with BRL 412.9 million a year earlier.
Net operating revenue increased 6.5% in the quarter to BRL 1.89 billion, supported by a 3.7753% tariff adjustment effective May 17, 2025, growth in billed sewage volume and a higher number of connections. However, total operating costs and expenses climbed 11.8% year on year, pressuring margins.
EBITDA edged down 0.5% to BRL 756.3 million in 4Q25, while the EBITDA margin narrowed to 40.0% from 42.8% a year earlier. Operating income declined 3.6% to BRL 590.2 million.
Cost pressures were driven mainly by personnel expenses, which rose 12.7% amid salary adjustments, higher healthcare plan costs and labor indemnities. Third-party services increased 16.5%, and expenses related to sewage operation services under public-private partnerships surged 203.2%, reflecting the start of PPP activities in 112 municipalities in 2025.
On the positive side, electricity costs fell 7.4% as 863 operating units migrated to the free energy market.
Despite the weaker quarterly performance, full-year results were stronger. Net income for 2025 rose 34.6% to BRL 2.08 billion. Annual net operating revenue grew 5.2% to BRL 7.21 billion, while EBITDA increased 0.9% to BRL 2.96 billion.
Capital expenditures jumped 46.9% in the fourth quarter to BRL 789.0 million, bringing total investments in 2025 to BRL 2.65 billion, up 38.8% year on year. The bulk of spending was directed to water and sewage expansion projects.
Sanepar also strengthened its balance sheet. Net debt fell sharply to BRL 1.78 billion at the end of December, compared with BRL 4.83 billion a year earlier. The net debt-to-EBITDA ratio improved to 0.6x from 1.6x in 4Q24.
The company ended 2025 with 3.53 million water connections and 2.65 million sewage connections, up 1.3% and 2.6% year on year, respectively. Service coverage remained at 100% for treated water and 82.4% for sewage collection in urban areas.
Shares of Sanepar closed 2025 at BRL 8.99 for common stock (SAPR3), BRL 7.80 for preferred stock (SAPR4) and BRL 40.18 for units (SAPR11). The company’s market capitalization stood at approximately BRL 12.4 billion at year-end.