Good afternoon, ladies and gentlemen. At this time, we’d like to welcome everyone to SABESP Conference Call to discuss its results for the year 2019. The audio for this conference is being broadcast simultaneously through the Internet on the Web site, https://www.sabesp.com.br, where you can also find the slideshow presentation available for download. We inform that all will only be able to listen to the conference during the Company's presentation. After the Company's remarks are over, there will be a Q&A period. At that time, further instructions will be given. [Operator Instructions]Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of SABESP's management and on information currently available to the Company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions, because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors, could also affect the future results of SABESP, and could cause results to differ materially from those expressed in such forward-looking statements.Today with us we have Benedito Braga, Chief Executive Officer; Rui Affonso, Chief Financial Officer and Investor Relations Officer; Mario Arruda Sampaio, Head of Capital Markets and Investor Relations; Sílvio Xavier, Head of Costs & Tariffs; and Marcelo Miyagui, Head of Accounting. Now, I will turn the conference over to Mr. Braga. Sir, you may begin the conference call.

Thank you. Thank you very much. Good morning, good afternoon or good evening, to all of you around the world. We are very happy to present to you today the excellent results, the excellent economic and financial results of our company during the year 2019. Fortunately, we are in a situation today in Brazil and all around the world with the coronavirus pandemic that is frightening people and impacting different sectors of the economy as well, and health and the lives of people.SABESP is, as you will see, very strong at the beginning of this pandemic in São Paulo State and in Brazil. Our company is prepared to help the authorities in solving the problem of the pandemic because more and more people at the highest level of decision making, are understanding the relationship between sanitation and health. We have been speaking about sanitation and health for decades. And this time is when everybody understands even more clearly this very close relationship, because without broader security, clean water, safe water security for drinking purposes and for cleaning purposes that is essential during this pandemic and for cleaning the streets, hospitals and all these important elements facing this pandemic, it becomes more and more apparent.And with this, I would like to stress some of the good positions we have today in order to help the government of São Paulo and Brazil to improve this very difficult situation in the health sector. We, in the last year, had a very important profit of the Company. We managed to bring in important municipality services in our business, namely Santo André with water and in Guarulhos with the sewage contract in the Company. This has improved our EBITDA margin as you will see with the presentation of Mario Sampaio in a moment.I would like, as CEO of this company, to stress to you that we are prepared to face this new crisis the same way we faced the water crisis that abated over us in 2014-2015. SABESP has already a record of facing important crisis situations and this one is not going to be different from the previous one. We're going to face it and we are going to win. And with this, I would like to pass the floor to Mario Sampaio to present to you the excellent results, and you will appreciate how prepared we are to help the pandemic in the State of São Paulo.

Thank you, Mr. Braga. Let’s start on Slide 3. Here we will present the evolution of the build volume. So the total volume build in 2019 disregarding the volumes of the municipality of Guarulhos and Santo André, grew by 2.7%, 2.4% in water and 3.1% in sausage. When we include Guarulhos and Santo André, the volume build shows a total growth of 3.5% with 0.2% in water and 7.7% in sewage. This is reflecting the migration of this municipality situation in which our company supplied water in the wholesale for the situation whether we directly today provide water, both water and sewage service as I said on a direct basis.In retail, excluding the effects of Guarulhos and Santo André, the greatest relative growth was observed in the public category with an increase of 4.6%, followed by the 2.7% increase in the residential category, 2.4% in the commercial category and 1.7% at the industrial category.Let’s move to Slide 4, we will here comment on our financial results. In 2019, our net income reached R$3.4 billion compared to a net income of R$2.8 billion in ‘18. This is an increase in our bottom line of 18.8%. This variation results from several factors, the most significant being the recognition of an extraordinary revenue resulting from the signing of the contract with the municipality of Santo André of R$1.3 billion and the financial result that vary positively by R$230.6 million.Net operating was R$18 billion compared to R$16.1 billion in ’18, representing an increase of 11.9%. If we disregard the effect of Santo André in 2019 and Guarulhos in ’18, net operating revenue was R$16.7 billion in '19 and R$15.2 billion in '18, which shows an increase of 9.8%. Regarding cost, administrative and commercial expenses and construction costs, there was an increase of 12%, mainly…

[Operator Instructions] And our first question will come from Lilyanna Yang of HSBC. Please go ahead.

Thank you for taking my question. So, I see your revenues are going a lot. Your cost are coming down, but you have two events on the place right. First is this May 7, 20, so when can we expect to hear more about the level type hike that it could get this year, you should be pushing closer to inflation? And maybe more importantly the second question is about your late review of May next year. So do you consider your current level of returns as reasonable or how can we see the price outcome for next year? And how can you make sure or how confident are you that the assets that you just acquired in Guarulhos and Santo André that you're going to be selling reflected in the rate review? Or if you give any color where you see the highest risks in the late review process, if it is on the RAB, if it is on the OpEx level or if it is on the WACC level? Thank you.

Lily, could you use that two events on the tariff where I guess the one on the rate review outcome, but what was the first?

The first was on the cash adjustment for these years May 2020, if you think it's coming without risks in line maybe with inflation or about debt?

Okay, Mr. Braga, would you like to comment on the first on the tariff adjustment for this year? Hello, well, let me convey.

Hello, yes, I'm here.

Okay.

Thank you. Lily. It’s very important and very good questions. There is no indication at this point in time that we will not have tariffs adjustments. Yes, we should have tariff adjustments and now in April is the time when this adjustment will take place, but the only thing we must have in mind is that we are in the middle of a health war. The government of Sao Paulo is giving daily reports on the development of the pandemic in the State of Sao Paolo. And of course, we are expecting the adjustments at the middle of April, but we are following what are the developments of the pandemic daily. But at this point of time, we do not foresee any problem with the readjustment of the tariffs at this place. Yes please.

Braga, it’s Rui. Lily, just one comment, as Mr. Braga said, we don't have any indication to now concerning the tariff readjustments, but we cannot close our eyes that the facts and I believe that behind your concerns some agencies, electricity agencies like ANEEL [indiscernible] are ready postpone it some readjustment of tariffs in the electricity and water due to these huge epidemic and economic crisis.So if something like this happened to us, what we can't say, it's like in the past, like it was crisis, the board of processes and the Board of Directors of SABESP, we really indicate that we will call for rate moving on advertise. Remember in 2015, we asked and we have it together in the ex-auditors review in 2015. And if that is the case, for sure the Company will ask for wake leader so that we can preserve our financials and economic indicators and sustainability.

Rui, thank you so very much. So Lily, this is absolutely important work our CFO, very careful CFO is informing you is that in the event of installment of the adjustment. We certainly will be compensated and no economic or financial impact will procure in the Company.

Thank you.

Mario, would you like to address the second question?

Yes. Lilly, could you formulate it again provided that we're talking here, I think, we covered and Braga covered the tariff adjustments in the rate review. So, I believe the other relates to costs.

Yes, the other question was more than the rate review of next year because our works start already today for an outcome one year from now. So, I wonder where to see your biggest concerns or where we could see the highest risks to the rate review is to the review of the regulatory asset base for instance the incorporation of Santo André [indiscernible]. You should seek more a walk discussion or there is going to be like more than 8.5 like [indiscernible] or is it going to be more on the 7% level like electricity distribution companies or if you think that the controversy might be in the OpEx level because this was a big deal in the second rate review. So, can you talk a little bit more color or what more or less state here and what's the latest prior to concerns here?

Just make sure that where do you want to comment.

Okay. Lily, we’re really just starting the real conversation discussion with our firstly, making our points and discussing the methodology of the [indiscernible]. But when all of us across by the epidemic economic crisis that more than others if isolate and everybody hope the reason of the discussions in its [indiscernible] mode. So, the point that we are at right now, I cannot see a measure a big risk as I told in our Portuguese Conference, there is still a year ahead of us to the new tariff review one.Second and hopefully, we can experience in the shorter time than these shorter period time. I can see certain vantage and certain better point of view from the regulatory body at the beginning of this discussion, especially concerning the asset basics. Remember that we agree to discuss these through the methodology of accounting numbers rather than replacement valid for an hour point of view is very good.The challenge as we mentioned of course remain on the new acquisitions because in this case we have to go to the ground and to make per se and it’s time cost. But at the same time I think the agents will take in considerations that go to the ground and test their assets in the middle of isolation that we all together would be more difficult. So we have to take into consideration in the final results of the tariff review.In the other part, in the other side remember that we have being discussing both on this, I believe that the agency disclose these with you, investors. The possibilities to discuss and discuss it close finally these remaining 6 billion to our 7 billion and we would see and we’re applying the corrections and retention and everything and still have 6 billion out of our tariffs, our rep. So this is good news. The net effect that after so many years, we restart discussing these from our points of view it’s good. We’re looking at recover part at least of this asset base, so it’s good news.The only concern I have is time. Not time just because of tariff review, but time in generally as we isolated as all of these things, the timeframe, all of these things becomes slow, slowly. That's, that's. But conceptually, I believe that they have more grounds to be more optimistic than in the past. We have to deal with these two major issues, but my belief is that the huge discussion would be in the rep and in the treatment we have to make in the case of the big acquisitions Santo André and Guarulhos.

[Operator Instructions] It looks like we do have a follow up from Lilyanna Yang from HSBC. Please go ahead.

Hi, thank you for the opportunity. Nobody is signed up yet. So, one other question is regarding your foreign exchange debt exposure, and I understand from the call in Portuguese that you are already acting to negotiate a change in your contract phase with the government agency mainly to change your exposure from dollar or yen or maybe to something like local. Would you give us an indication of what would be your cost of debt for funding in local currency? I know it's difficult to see now maybe you cannot use structural data points that you might find helpful for us. Thank you.

Thank you, Lily. It’s very critical question. Well, I think that before Rui will answer very specifically on this one. That the decision of the Board of Directors and the Board of the Company on avoiding loans in foreign currency and making sure that we could find ways of exploring existing contracts loans into local currency. It's now very clearly stated and it's not related to COVID-19 coronavirus. This was something we decided before this situation, but I'm sure that Rui has the details to explain it to you this first.

Lily, again, well we are under discussion with these two major big financers. They are DB and IDB banks that together represent the stock of effects that around $600 million, so, it's a lot. We are discussing so they cannot display the costs. Remember that the union, the federal government and the state governments, especially state that federal part of these, because they are council guarantee the provider us, the council guarantee for those sovereign funds.So, we are currently in discussions with the World Bank and the IDB. What we can say to you is that we start the process to discuss and to reduce our exposures in the foreign currency exactly in those cases that we have long-term low cost savings and as the collateral sovereign banks sign by sovereign treasures and countries. So, it's either should be easy to do that at a lower cost and in a very short that's the strategy. So, I need this sooner we conclude at least part of this changes. We inform to you all the details. You wanted and really pleased to have. That's it.

That's great news, thanks. For your bones that all are denominated, how expensive would it be to hedge or is not worth it at this point in time? And I assume that you have not hedged any of those since December 2019, right, correct?

Right, correct. We don't have any of those, but they have the under clauses, the contract, the possibility to change. We see less costly costs rather than in the private capital markets. That's the important thing and as the volatility starts to be present important issue in our macroeconomic scenario that’s here. Many, many months before the coronavirus appear on the recession, the world recession, we starting with these strategies. It’s a long-term strategy, it's not just one movement strategy and that is important. It's important. We believe that we choose the lower shoots to catch and I believe there are lower, but big and important tools.

It appears that we have no further questions. Now, I'll turn the conference back over to the SABESP for their final remarks.

Okay. Well, thank you for your participation in our call. Be assured that SABESP will continue to work very efficiently, very carefully regarding being prudent in all the movements that we make during this important health event that we're going through.We assured also that we have water security in the area. Our sanitation sector is being preserved by the government as an important asset to solve the corona crisis. So, we are part of the solution and not part of the problem. With the good results of 2019, we are very sure that we will face the challenge and we will win the battles and finally the war.Thank you so very much. I don't know if you really would like to say some words before we close.

So, just to say thank you very much and our CEO in a [indiscernible] way closes this call with optimistic or resilient message to all of you. Thank you very much.

Thank you all. Thank you. Bye, bye.

We thank you also to the management team. Again, we thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you, again everyone take care and have a wonderful day.