UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of June, 2024
(Commission File No. 1-31317)

Companhia de Saneamento Básico do Estado de São Paulo - SABESP

(Exact name of registrant as specified in its charter)

Basic Sanitation Company of the State of São Paulo - SABESP

(Translation of Registrant’s name into English)

Rua Costa Carvalho, 300

05429-900 São Paulo, SP, Brazil

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒      Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐      No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐      No ☒

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ☐      No ☒

If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b):

N/A

CERTAIN TERMS AND CONVENTIONS

All references in this Report of Form 6-K to “we,” “our,” “ours,” “us” or similar terms refer to Sabesp and its consolidated subsidiaries, except where specified or differently required by the context. All references herein to the “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “US$,” “dollars” or “U.S. dollars” are to United States dollars.

Additionally, acronyms used repeatedly, defined and technical terms, specific market expressions and the full names of our main subsidiaries and other entities referenced in this Report on Form 6-K are explained or detailed in the glossary of terms beginning on page 7 to our 2023 Form 20-F.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

The information found in this Form 6-K is accurate only as of the date of such information or as of the date of this Form 6-K, as applicable. Our activities, our financial position and assets, the results of transactions and our prospects may have changed since that date.

The reference dates for the quantitative information derived from our unaudited condensed consolidated interim statement of financial position included in this Form 6-K are March 31, 2024, and December 31, 2023, and the reference period for our unaudited condensed consolidated interim income statement are the three-month periods ended March 31, 2024, and 2023 (“Unaudited Condensed Consolidated Interim Financial Statements”).

All financial information for the three-month period ended March 31, 2024, was prepared on a consolidated basis, while all financial information for the three-month period ended March 31, 2023, was prepared on an individual basis because we had no subsidiaries to consolidate.

Our Unaudited Condensed Consolidated Interim Financial Statements, included at the end of this Form 6-K, are prepared in compliance with International Accounting Standard (“IAS”) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (“IASB”).

Our Unaudited Condensed Consolidated Interim Financial Statements were the subject of limited procedures in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) for a review of such information by BDO RCS Auditores Independentes SS Ltda., our independent auditors for the three-month period ended March 31, 2024.

Certain figures in this document have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts and are based on management’s current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our Unaudited Condensed Consolidated Interim Financial Statements and accompanying notes and other financial information included elsewhere in this Form 6-K and the description of our business in “Item 4. Information on the Company” in our 2023 Form 20-F. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from these discussed in forward-looking statements as a result of various factors, including, without limitation those set forth in “Item 3.D. Risk Factors” in our 2023 Form 20-F.

A. Operating and Financial Review and Prospects Overview

As of March 31, 2024, we operated water and sewage systems in the State of São Paulo, including in the city of São Paulo, Brazil’s largest city. Our operations extended into a total of 376 municipalities, or 58% of all municipalities in the state. We also provided water services and accounted for on a wholesale basis to two municipalities located in the São Paulo metropolitan region in which we did not operate water distribution systems. Our capital expenditure program is our most significant liquidity and capital resource requirement.

Since December 11, 2023, we started providing water and sewage services in Olímpia, through our wholly-owned subsidiary Sabesp Olímpia S.A.

The following table sets forth, for the periods indicated, certain items from our income statements, each expressed as a percentage of net operating revenue:

This section is an overview of our consolidated results of operations, net of inter-segment eliminations, which are discussed in greater detail with respect to each segment below.

Net Operating Revenue

Net operating revenue increased by R$861.8 million, or 15.1%, to R$6,560.2 million as of March 31, 2024, from R$5,698.4 million as of March 31, 2023. Excluding the effect of construction revenue, net operating revenue increased by R$704.7 million, or 15.6%, to R$5,223.5 million for the three-month period ended March 31, 2024, compared to R$4,518.8 million for the three-month period ended March 31, 2023. Construction revenue for the three-month period ended March 31, 2024, was R$1,336.8 million, compared to R$1,179.5 million for the three-month period ended March 31, 2023. This increase was mainly due to a tariff readjustment of 9.6% since May 2023 and an increase of 5.3% of the total invoiced amount.

Operating Costs

Our operating costs for the three-month period ended March 31, 2024, increased by R$321.7 million, or 8.8%, to R$3,975.4 million for the three-month period ended March 31, 2024, from R$3,653.7 million for the three-month period ended March 31, 2023. This increase was mainly due to (i) an increase of R$153.7 million in construction costs associated with increased investment; (ii) an increase of R$113.5 million in depreciation and amortization costs due to the entry into operation of certain intangible assets; and (iii) an increase of R$69.2 million in service costs, comprising among other things R$42.9 million related to the maintenance of networks, connections and systems and R$8.9 million to pave and repair sidewalks.

Gross Profit

As a result of the factors described above, gross profit for the three-month period ended March 31, 2024, increased by R$540.1 million, or 26.4%, to R$2,584.8 million for the three-month period ended March 31, 2024, from R$2,044.7 million for the three-month period ended March 31, 2023. As a percentage of net operating revenue, our gross profit margin increased to 39.4% for the three-month period ended March 31, 2024, from 35.9% for the three-month period ended March 31, 2023.

Selling Expenses

Selling expenses for the three-month period ended March 31, 2024, decreased by R$15.6 million, or 6.9%, to R$210.1 million for the three-month period ended March 31, 2024, from R$225.7 million for the three-month period ended March 31, 2023. This decrease was mainly due to a reduction of (i) R$8.1 million in expenses related to the contracting of services and (ii) R$7.7 million in expenses related to salaries, charges, benefits and social security obligations, mainly due to a decrease in our number of employees.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts for the three-month period ended March 31, 2024, increased by R$27.7 million, or 17.0%, to R$190.5 million for the three-month period ended March 31, 2024, from R$162.8 million for the three-month period ended March 31, 2023. This increase was mainly due to an increase in sanitation revenue.

Administrative Expenses

Administrative expenses for the three-month period ended March 31, 2024, increased by R$253.4 million, or 89.0%, to R$538.1 million for the three-month period ended March 31, 2024, from R$284.7 million for the three-month period ended March 31, 2023. This increase was mainly due to a provision of R$162.4 million for the Agreement with AAPS - Association of Retirees and Pensioners of SABESP, and an increase of R$68.7 million in expenses related to legal proceedings.

Other Operating Income (Expenses), Net and Equity in Results of Investments in Affiliates

Other operating income and expenses, net, for the three-month period ended March 31, 2024, decreased by R$4.9 million, or 23.4%, to R$16.0 million for the three-month period ended March 31, 2024, from R$20.9 million for the three-month period ended March 31, 2023.

Other operating income consists of gains and losses made from the sale of property, plant and equipment, the sale of contracts awarded in public bids, our right to sell electricity, indemnities and reimbursement of expenses, fines and collaterals, property leases, reuse of water, PURA projects and services, net of COFINS and PASEP.

Other operating expenses consist mainly of derecognition of concessions assets due to obsolescence, discontinued construction works, unproductive wells, projects considered economically unfeasible, losses on property, plant and equipment and recognition and reversal of estimated losses with asset indemnification.

Financial Result, Net

The financial result consists primarily of interest on our indebtedness and foreign exchange losses (or gains) in respect to our indebtedness, offset partially by interest income on cash and cash equivalents and financial investments and inflation-based indexation accruals, mainly relating to agreements entered into with certain customers to settle overdue accounts receivable.

The financial result, net, for the three-month period ended March 31, 2024, increased by R$78.7 million in expenses, or 30.3%, to R$338.2 million for the three-month period ended March 31, 2024, from R$259.5 million for the three-month period ended March 31, 2023. This increase in expenses was mainly due to (i) a reduction of R$77.5 million in exchange variation gains on borrowings and financing, due to the appreciation of the U.S. dollar and depreciation of the Yen in March 31, 2024 (3.2% and (3.5)%, respectively), compared to the depreciation recorded in respect of both currencies in March 31, 2023 ((2.6)% and (3.3)%, respectively); (ii) an increase of R$67.2 million in other financial expenses, due to the R$60.1 million increase in interest with respect to our public-private partnership agreements (PPPs); and (iii) an increase of R$7.7 million in interest and charges on international borrowings and financing, mainly due to new IDB fundraising.

This increase in expenses was partially offset by (i) an increase of R$32.7 million in financial revenues, mainly due to higher interest charged on overdue bills in March 31, 2024; (ii) a decrease of R$32.2 million in other monetary variations, mainly due to lower monetary variation on PPPs in March 31, 2024; and (iii) a decrease of R$16.5 million in monetary variations on borrowings and financing, mainly due to a decrease in IPCA (from 2.1% in March 31, 2023 to 1.42% in March 31, 2024), as well as higher capitalization of monetary variation on debentures in March 31, 2024, of R$5.5 million.

Profit Before Income Tax and Social Contribution

As a result of the factors discussed above, profit before income tax and social contribution for the three-month period ended March 31, 2024, increased by R$191.0 million, or 16.9%, to R$1,323.9 million for the three-month period ended March 31, 2024 from R$1,132.9 million for the three-month period ended March 31, 2023.

Income Tax and Social Contribution

Income tax and social contribution expense for the three-month period ended March 31, 2024, increased by R$114.9 million, or 29.8%, to R$500.6 million for the three-month period ended March 31, 2024, from R$385.7 million for the three-month period ended March 31, 2023. This increase was mainly offset by (i) an increase of R$559.5 million in costs and expenses, and (ii) a negative variation of R$78.7 million in our financial results.

Profit for the Period

As a result of the factors discussed above, our profit for the three-month period ended March 31, 2024, increased by R$76.1 million, or 10.2%, to R$823.3 million for the three-month period ended March 31, 2024, from R$747.2 million for the three-month period ended March 31, 2023.

Non-GAAP Financial Measures

Our computation of EBITDA, LTM EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted Net Revenue (excluding construction revenue), Adjusted EBITDA Margin, Gross Debt, Net Debt and Total Capital may not be comparable to other similarly titled measures computed by other companies, because other companies may calculate Gross Debt, Net Debt and Total Capital differently. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with IAS 34. These measures are not audited or reviewed by our independent auditors. We urge investors to review the reconciliations of the non-GAAP financial measures presented above.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

We have disclosed EBITDA in this Form 6-K, which is considered a non-GAAP financial measure. A non-GAAP financial measure is any financial measure that is presented other than under all relevant accounting standards under IAS 34. EBITDA refers to net income, before net financial results, income tax and social contribution on profit, and depreciation and amortization.

Our management believes that disclosure of EBITDA provides useful information to investors, financial analysts and the public in their review of our operating performance and their comparison of our operating performance to the operating performance of other companies in the same industry and other industries. This is because EBITDA is generally perceived as a more objective and comparable measure of operating performance. For example, interest expense is dependent on the capital structure and credit rating of a company. However, debt levels, credit ratings and, therefore, the impact of interest expense on earnings vary significantly between companies. Similarly, the tax positions of individual companies can vary because of their differing abilities to take advantage of tax benefits and the different jurisdictions in which they transact business. Finally, companies differ in the age and method of acquisition of productive assets, and thus the relative costs of those assets, as well as in the depreciation method (straight-line, accelerated or units of production), which can result in considerable variation in depreciation and amortization expenses between companies. Therefore, for comparison purposes, our management believes that EBITDA is useful as an objective and comparable measure of operating profitability because they exclude these elements of earnings that do not provide information about the current operations of existing assets.

Adjusted EBITDA

We calculate Adjusted EBITDA as our net income for the period adjusted by the effect of the Incentivized Dismissal Program - PDI, the Agreement with AAPS – Association of Retirees and Pensioners of Sabesp, construction margin, other operating expenses (income), net, before the net financial result, income and social contribution on profit and depreciation and amortization. Adjusted EBITDA does not have a standardized meaning and may not be comparable to Adjusted EBITDA or similarly-titled measures as used by other companies. Moreover, Adjusted EBITDA has limitations as an indicator of profitability, since Adjusted EBITDA does not consider certain costs in connection with our business, which could adversely affect our profits, such as our financial results, taxes, depreciation and amortization, as well as other items recorded in our income statement and described above. This calculation of Adjusted EBITDA is not the same calculation of Adjusted EBITDA used to measure compliance with covenants included in our financing agreements and debenture issuances.

Adjusted Net Revenue (excluding construction revenue)

Adjusted Net Revenue is calculated by subtracting construction revenue from net revenue. We use Adjusted Net Revenue as a management (non-accounting) indicator, as we believe it is fundamental for measuring our operational profitability. Adjusted Net Revenue is considered a non-GAAP financial measure and is not a measure recognized by Brazilian Accounting Practices or IAS 34, nor should it be considered in isolation or as an alternative to net income, as a measure of operational performance, or as an alternative to operational cash flows, or as a measure of liquidity. It does not have a standardized meaning and may not be comparable to similar measures used by other companies.

Adjusted EBITDA Margin

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by Adjusted Net Revenue. The Adjusted EBITDA Margin is considered a non-GAAP financial measure and is not a measure recognized by Brazilian Accounting Practices or IAS 34, nor should it be considered in isolation or as an alternative to net income, as a measure of operational performance, or as an alternative to operational cash flows, or as a measure of liquidity. It does not have a standardized meaning and may not be comparable to similar measures used by other companies.

Net Debt

Net Debt is a non-GAAP measure we use to monitor the long-term effects of our debt on our business and to ensure compliance with financial leverage ratios. It is calculated by adding our current and non-current loans and financing, plus derivatives, net, less our cash and cash equivalents. Our definition of Net Debt may not be comparable to Net Debt used by other companies and is not a measure of cash flow, liquidity or resources available for debt service. For a reconciliation of our Net Debt to our total loans and financing and cash and cash equivalents for the relevant periods, see 4.2 to our Unaudited Condensed Consolidated Interim Financial Statements.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

(1) Other operating income refers to gains from the sale of fixed assets, sales of public notices, sale of electricity rights, indemnities and reimbursement of expenses, fines and deposits, property rentals, reclaimed water, projects and services under the Rational Water Use Program (PURA) and are presented net of COFINS and PASEP taxes. Other operating expenses refer to the write-off of concession assets due to obsolescence, decommissioned works, unproductive wells, economically unfeasible projects, losses of fixed assets, and the establishment and reversal of estimated losses related to asset indemnification.

(2) Non-recurring event related to the provision recognized for the Incentivized Dismissal Program – PDI.

(3) Non-recurring event related to the provision of an agreement made with AAPS - Association of Retirees and Pensioners of SABESP.

(4) Construction revenue minus construction cost.

(*) Unaudited.

We adjust such items in the EBITDA as they are either do not constitute part of our business plan or are non-recurring events and, as such, do not contribute to information about our potential for gross cash generation. This calculation of Adjusted EBITDA is not the same calculation of Adjusted EBITDA used to measure compliance with covenants included in our financing agreements and debenture issuances.

Last Twelve Month (“LTM”) EBITDA and Adjusted EBITDA

The table below sets forth a reconciliation of our LTM EBITDA and LTM Adjusted EBITDA to our net profit (loss) for each of the periods presented below:

(1) Other operating income refers to gains from the sale of fixed assets, sales of public notices, sale of electricity rights, indemnities and reimbursement of expenses, fines and deposits, property rentals, reclaimed water, projects and services under the Rational Water Use Program (PURA) and are presented net of COFINS and PASEP taxes. Other operating expenses refer to the write-off of concession assets due to obsolescence, decommissioned works, unproductive wells, economically unfeasible projects, losses of fixed assets, and the establishment and reversal of estimated losses related to asset indemnification.

(2) Non-recurring event related to the provision recognized for the Incentivized Dismissal Program – PDI.

(3) Non-recurring event related to the provision of an agreement made with AAPS - Association of Retirees and Pensioners of SABESP.

(4) Construction revenue minus construction cost.

(*) Unaudited.

Debt Ratios

(1) Gross Debt consists of our current and non-current loans and financing. Gross Debt is a non-GAAP measure (and therefore, not based on a measure calculated and presented in accordance with IAS 34 or other accounting principles) and may not be comparable to other similarly titled measures used by other companies, because other companies may calculate Gross Debt differently.

(2) Net Debt means Gross Debt less cash and cash equivalents and financial investments. Net Debt is a non-GAAP measure, and accordingly, is not based on a measure calculated and presented in accordance with IAS 34 or other accounting principles) and may not be comparable to other similarly titled measures used by other companies, which may calculate Net Debt differently.

(3) Total Capital is calculated by adding Shareholders’ Equity, as shown in the balance sheet, to Net Debt.

(4) Leverage ratio (%) is calculated by dividing net debt by total capital.

(*) Unaudited.

Reconciliation of our Gross Debt, Net Debt, and Total Capital

(1) Gross Debt consists of our current and non-current loans and financing.

(2) Net Debt means Gross Debt less cash and cash equivalents and financial investments.

(3) Total capital is calculated as total equity plus net debt, as shown in the statement of financial position.

(*) Unaudited.

B. Liquidity and Capital Resources

Capital Sources

In order to satisfy our liquidity and capital requirements, we have primarily relied on cash provided by operating activities, long-term borrowings from Brazilian federal governmental financial institutions, and long-term financing from multilateral organizations and from domestic and international development banks, and also from the capital markets. As of March 31, 2024, we had R$2,019.4 million in cash and cash equivalents. The outstanding current indebtedness was R$2,716.4 million as of March 31, 2024, of which R$246.3 million was denominated in foreign currency. Long-term indebtedness was R$19,307.9 million as of March 31, 2024, of which R$2,384.8 million consisted of foreign currency-denominated obligations.

Management expects that we will have sufficient funds to meet our commitments and not compromise our planned investments, given the works we carried out to improve our water security and to reduce defaults, as well as the cash we generated from operations and the availability of credit lines for investments.

In order to finance the constant investment needs in our infrastructure, we use third party funds to complement our own resources. We believe that we currently have sufficient sources of funds to implement our short- and medium-term strategy.

Cash Flows

Net Cash Generated from Operating Activities

Cash generated from operating activities is the single largest source of our liquidity and capital resources, and we expect that it will continue to be so in the future. Our net cash generated from operating activities was R$1,397.4 million and R$395.3 million for the three-month period ended March 31, 2024, and 2023, respectively. The main driver of our cash flow from operating activities relates to our cash collections from customers, which is due to the nature of our business and to the fact that we are expanding our infrastructure. There was an increase in net cash generated from operating activities in the three-month period ended March 31, 2024, of 253.3%.

Net Cash Used in Investing Activities

Net cash used in investing activities was R$2,284.8 million and R$583.6 million for the three-month period ended March 31, 2024, and 2023, respectively. The main driver of our net cash outflow for investing activities relates to purchases of intangible assets, as required under our concession and program contracts, which is due to the fact that we are expanding our infrastructure and service coverage. There was an increase in net cash used in investing activities in the three-month period ended March 31, 2024, of 291.5%.

Net Cash Generated by (Used in) Financing Activities

Our net cash generated by financing activities was R$2,068.3 million for the three-month period ended March 31, 2024, compared to R$842.8 million in net cash used for the three-month period ended March 31, 2023. The main driver of our cash flows from financing activities relates to the proceeds and repayments of loans used to finance purchases of intangible assets related to our concession and program contracts, in order to support the expansion of our services and our payment of interest on capital. For the three-month period ended March 31, 2024, (i) our financings increased by R$2,818.1 million compared to the same period in 2023 and (ii) our amortizations decreased by R$56.2 million compared to the same period in 2023.

Waivers and Creditors’ Approvals

As our Proposed Privatization would lead to the State of São Paulo no longer being our controlling shareholder under our outstanding financings, we obtained waivers and prior consents from certain creditors that included covenants and restrictions concerning to such provisions in their agreements. Under the agreements referred to below, a change in control rating downgrade event triggered by our Proposed Privatization, the consequent amendment of our bylaws and certain investments that could affect our capital structure could lead to an acceleration, cross-default, cross acceleration or termination of certain agreements governing our debt, if we are unsuccessful in obtaining the following waivers and prior consents. Below is a summary of the waivers, approvals, and amendments received or executed by us since the date of our 2023 Form 20-F:

As of the date of this interim report we have received waivers in respect of the following financings: