Stronger real, rates hike help Sabesp Q3

A stronger real and a 19% rates hike in August helped Brazil's Sao Paulo state water utility Sabesp post net profits of 28.9mn reais (US$9.79mn) in the third quarter, versus a 664mn-real loss in the same year-ago period, the utility said in a statement. Over the same period revenue was up 8.8% to 1.08bn reais, while operating profit closed at 55.6mn reais, versus a 979mn-real loss in 3Q02. Sabesp has been converting its long-term debt into reais from US dollars to lower its exposure to currency devaluation. For the January-September period, Sabesp posted a 533mn-real net profit, compared to losses of 882mn reais in the same period last year, while revenue rose 8.2% to 3.14bn pesos and operating profit came in at 807mn reais, versus a 1.31bn-peso loss last year. The company has earmarked investments of between 550mn and 600mn reais a year through 2006. Sabesp is Brazil's largest water utility in terms of users, serving 323 of Sao Paulo state's 645 municipalities. It provides water to 25 million residents through a 54,000km network and sewerage service to 16.8 million residents through a 34,000km collection network.