By Brazil Stock Guide – Copasa MG (B3: CSMG3) posted a 23.9% increase in fourth-quarter net income, reaching R$337 million, as higher tariffs and improved efficiency boosted margins. Revenue rose 6.9% from a year earlier to R$1.88 billion. EBITDA climbed 14.1% to R$731 million.
The result reflects the 6.42% tariff adjustment implemented in January and stronger measured volumes. Water consumption rose 3.3% in the quarter, while sewage volumes increased 4%. At the same time, distribution losses fell sharply to 32.4%, down 5.7 percentage points year over year. The company replaced 730,000 meters and expanded leak-detection systems. Delinquency eased to 2.91% in December.
Costs grew at a slower pace than revenue. Operating expenses excluding depreciation rose 3%. Electricity costs remained pressured. Personnel expenses advanced after collective agreements. Even so, operating leverage widened margins. For the year, Copasa earned R$1.42 billion, up 7.5%, and distributed R$653 million in regular dividends plus R$200 million in extraordinary payouts. Net debt stood at 2.3 times EBITDA.
Privatization Backdrop
The earnings report comes as Minas Gerais moves forward with Copasa’s privatization. In December, the state legislature approved the law authorizing the sale of control. In January, the company amended its bylaws — a technical step that usually precedes market transactions. The model, timing and valuation remain undisclosed.
Board Turbulence
At the same time, Copasa faces a leadership reshuffle. Gustavo de Oliveira Barbosa, already a board member, was elected chairman of the board, replacing Hamilton Amadeo, who resigned earlier this month. Board member Márcia Fragoso Soares was chosen as vice chair.
Amadeo stepped down after Brazilian news outlet UOL reported that he had told federal prosecutors, as part of a plea agreement, that he authorized bribe payments to politicians to secure concession contracts while serving as chief executive of Aegea between 2011 and 2020. The episode adds reputational sensitivity to a company preparing for privatization.
Scale and Targets
Water coverage exceeds 99%, already above Brazil’s federal targets. Sewage coverage reached 80.1%, progressing toward the 90% goal set for 2033. Capex surged 32% in 2025 to R$2.9 billion as the company invests to meet universalization requirements.
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