Costs drive Corsan into the red

Brazil's Rio Grande do Sul state water utility Corsan posted an 8.83mn-real (US$3.56mn) net loss in the first quarter, versus a 20.9mn-real net profit in 1Q04. Although gross revenue rose 11% to 232mn reais due to increased connections and rates, operating profit dropped 94.3% to 1.61mn reais due to higer costs, Corsan reported to the country's securities regulator (CVM). In 2004, the utility saw net profits rise 4.65% to 25.5mn reais compared to the previous year. Corsan provides drinking water and sewerage service to more than 6 million residents (two-thirds of the state's population) in 342 municipalities.