Okay. Good morning to all. Welcome to SABESP’s Video Conference to discuss the Earnings for Q3. My name is Mario Sampaio, I am Head of Capital Markets and Investor Relations at SABESP. Today, we have with us here, Dr. Benedito Braga, Chairman of SABESP; Mr. Osvaldo Garcia, Director, Financial Economic Director, and Investor Relations; Mr. Marcelo Miyagui, Head of Accounting; Marcel Sanches, Superintendente of -- for Regulation. Before passing the floor to Dr. Braga to begin the conference, I’d like to give some information. First, this video conference is being recorded, and the presentation will be available for download at our portal, where we already have the press release. We will accept questions only in writing through chat. Our conference will be for an hour and 30 minutes, and we will have 45 minutes to answer questions from analysts. And at the end, we will have time for questions from journalists. To include a small disclosure, we would like to clarify that any declarations made during this conference concerning the business prospectives of the company, projections, operational and financial goals are based on beliefs and assumptions of the company’s Board and also information currently available to the company. Considerations about the future are not guarantee of performance. They involve risks, uncertainties because they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operational factors may affect the future of the company and may lead to results that may differ materially from those expressed in these considerations about the future. Now, I would like to pass the floor to Dr. Braga. Dr. Braga, you have the floor for the opening of this conference.

Thank you very much, Mario. Good morning to everyone. It’s a great satisfaction to bring to you on this rainy morning good news to all. We had very positive financial results but I will allow our CFO, Dr. Osvaldo Garcia to talk about this point to you. I would like to begin with three or four topics that are to your interest. Also as result of this good news, we have a rainy morning. Concerning the water safety, we had -- we are actually having a situation that is an extreme drought in the Southeast of Brazil and this even affected the electricity sector, and also as Dr. Osvaldo may explain issues involving cost of energy that went up as a result of this extreme drought situation that we are having. And we were able to get a special authorization from the water authorities to bring from our reservoir in Jaguari on Paraíba do Sul River, 40 million cubic meters. These are additional until the end of this year, and an additional 40 million cubic meters until the end of this year, thus increasing our water safety. I also inform in this direction talking about water safety that the works for abstraction of water from Itapanhaú River to the reservoir Biritiba-Mirim in the Alto Tietê system may remove or may abstract 2.5 million cubic liters of water with a monthly average. Like this, the works are going fairly well. And in the first semester of next year, we will have the inauguration of this supplementary system. Now concerning rainfall, we had a month of October that was a little above average in terms of rainfall. But a month of November, in the first two weeks, November with little rainfall, but we still have hopes that in the second part of…

Good morning, Chairman, Braga. Good morning to all. I thank you all for participating in this video conference to discuss the earnings of Q3 2021. Beginning on Slide 3, we observe the total volume built with a growth of 3.7% in relation to Q3 ‘20. This considering the volumes of Mauá, which in this quarter is working in retail and Q3 -- in Q3 2020, they were working not in retail. Well, just considering the volumes that are exempt from collection and also social and residential categories in shantytowns, going from 957.3 million to 992.7 million cubic meters built. This growth is greater in the sewer services, 4.1% in relation to the volume build in the segment of water that rose 3.4%. The most significant increase happened in the non-residential categories, where tariffs are higher, 15.7% in public, 7% in commercial and 6.6% industrial clients. In the Residential segment, which represents the greatest volume in relation to the total, the growth was 3.2%. With a recovery of consumption in non-residential categories, we noticed a recovery in the average tariff with favorable impact on revenue. Next slide, please. Now, we'd like to see the slide with financial numbers. The revenue from sanitation services had an increase of 17.7% in the period going from R$3.6 billion in Q3 '20 to R$4.3 billion in Q3 '21, especially as a result of tariff increases applied on clients’ bills; in August 2020 3.4%; and since May this year, an increase of 7%. The effects can be seen in the revenue in this quarter when compared to the same quarter last year. Also we had the increase of 3.7% in the total volume build, which explains the relevant increase of the total revenue of sanitation services and the operation of water distribution in retail in the…

Everybody listening here, I’d just been muted. Hello? Okay. I'm taking over here. We would like to begin our Q&A session. . I will check with Dr. Braga. The question is from . He asked many questions concerning tariffs and price increases, indicators, period, and when we will have the tariff structure? Dr. Braga please guide us.

The implementation of the new tariff structure will happen in April next year and will be implemented in May -- will begin in May. But I see here that there are more detailed questions on revenue and so forth. I will ask, Osvaldo and Marcel to answer these questions.

Marcel, I will try to answer. Please supplement. Concerning the revenue, we have -- the amount is R$17.5 billion. And if SABESP has an expectation in relation to revenue this year, what I can say today that it is a little below the required revenue, but only at the end of December where we will have the final number. We believe it'll be a little lower, but not very much lower. Now concerning the period of evaluation -- of inflation, I'd like to say that our P0 was February 2021, and therefore the way the -- since the agency will treat this in March, let's see the index that will be used. So, we can adjust for inflation in the period. This will be discussed in April and implemented as of May. Now, concerning tariffs, the Chairman already mentioned, it will -- the new system will be implemented in May 2022. If you like to supplement, Marcel?

No. Perfect.

The next question is from . How is the process concerning a possible privatization of the company?

Well, always reminding you that this topic of privatization is up to our Controller. It's not up to us to discuss this point. I would like to say, concerning the progress, it is what is public, our Economic Minister has said, everyone knows that the privatization committee of the government is analyzing this topic for the companies’ tariff, and intends to hire the IFC, to prepare a study. This is the information that is public and everyone knows. I have no additional information apart from what we read in the press.

Well, we are awaiting more questions for the time being we had . A question from . The question is, please give us an update about the investments in the new Pinheiros River. So please talk about the schedule, amount invested, measurement of results and expectations involving conclusion.

Well, it is a great pleasure to answer this question. In October, we connected 428,000 users of the 530,000 savings for this project new Pinheiros River. We have the concrete hope to finalize until the end of 2023, all the 533,000 savings apart from the quality recovery units for streams that feed the Pinheiros River. We have 5 stations, total investments R$1.7 billion. We’re only paying -- according to results, we have 87% of physical part working ready. But in terms finance we’re close to 30%, 40% in terms of payments, because the payment is only made when you have the results in terms of connections and quality of water in the streams that feed the Pinheiros River. So it’s a project that is going very well, very successful even during the pandemic, we’re going beyond the forecast. As I mentioned, the forecast was 85% in October, and we have 87% ready.

Okay, we’ve a question from Daniel Travitzky. And the question is, please comment on expansion plans for operations, participation in auctions for sanitation and expansion to other states?

The company is very connected to new businesses, expansion. Dr. Osvaldo in the financial department has a superintendent allocated to treat this topic of new businesses. We are looking at this topic with great interest. We are focusing right now on the universalization and to reach the goals that we have in our program for 2033. As I mentioned in my initial speech, we are observing this. We have outside consultants for M&A to help us. We are competing for Uberlândia for -- to take care of the city, next close to Franca where we are already present. But maybe Dr. Osvaldo cam supplement with some comments in terms of new businesses.

Mr. Chairman supplementing this information, it's basically what you mentioned. Our focus is in serving the 325 contracts, improving our economic and financial capacity and CapEx. But of course, after January 1st, when we have the confirmation of the financial capacity in the other companies, we expect some action, especially in new businesses. We're focused in looking at the opportunities. First, with priority to our states São Paulo and then other businesses participating in auctions together or together with other companies.

We have a question from Carolina Carneiro from Credit Suisse. The question is, on the implementation of the new tool for collection that Dr. Braga mentioned. Specifically, she wants to know, how long will it take to implement this new tool? And expectations to decrease PDD, which will happen in Q4?

The tool is already working. We are improving the ways -- the better ways to collect, more modern ways to collect, which should happen in the next two, three months in the beginning of the year. At the beginning of the year, we will have more news about this, using WhatsApp, using BICs for payments, all these modern tools for payments and also more effective ways to reduce delinquency. But the tool is already working, but these upgrades will happen in the next 3, 4, 5 months.

Right now, we don't have any new questions. I understand that system identifies whether these are analysts. Dr. Braga, can we open the floor to journalists?

Yes.

So, let's wait a little. Let's see if we receive questions. In order to clarify point, so we will wait a little.

One point involving logistics. The only way to receive questions is through the Q&A or do we have other ways to receive questions from analysts and journalists?

Only through Q&A. Questions only through the Q&A. I didn't see Caroline’s questions. Caroline is an analyst. She had difficulty to ask her question. So, she is an analyst. She has contact with company. She sent it through WhatsApp and I read the question. Okay. We have more questions. Dr. Braga, Dr. Osvaldo, the question is from . How are the recent changes having an impact on the company? How is the issue of costs? How are the costs?

Very well. This question is for Dr. Osvaldo.

Okay. Mr. Chairman. Well, in the macroeconomic system, we had an increase in interest rates. This will have an impact on our costs with -- because of the loans we have and our debts. Now concerning the other issue, it's a great concern of the company. This variation with higher inflation, this has put pressure on many of our costs, operational costs, cost of materials, cost of electricity had a direct impact not only by inflation but also the drought, the scarcity of water in the reservoirs. We are looking at this very careful, that's why I mentioned this point. But the costs are under control and within the goal that we had projected. Pressure exists. We are working now for this pressure not to have a great effect.

Okay. I believe we have another question. I believe it was already answered. , he asks, whether SABESP intends to participate in sanitation auctions? This was answered. Maybe we can have more comments.

Well, myself and Osvaldo, we answered. We are alert. We're looking at the possibilities, we may participate as -- if it does not affect our contracts, our end contracts. Now with the new regulations, we have an important challenge. mentioned this possibility of new businesses, but also there are serious issues, because we have goals with our current contracts. That's why we're focused on reaching the goals in our contract. But as Osvaldo mentioned, we are alert. We’re looking at the opportunities if we can have important financial results enabling an acceleration of the universalization. In São Paulo, we will consider the opportunities. Mario, it seems that I said that we would deliver the new Pinheiros River at the end of 2023. No, I did not say that. If someone understood 2023, they understand it wrongly. 2022, next year, clean Pinheiros River from our viewpoint. Okay, next question.

who asked the question about revenue. He asks for details and clarifications. Concerning the required revenue, is it R$17.5 billion for 2021, and based on prices of -- is this based on prices of February, 2021. Is this net revenue in the two cases?

The answer is, yes. Okay. Waiting for more questions. Remind you that those who are listening through the translation in English are invited to ask questions. You may ask questions in English too. So please feel free to ask questions in English.

SABESP is innovating. In the past, we used two of our periods to have the report in Portuguese and then in English. Now, with the Zoom technology, today, we’re doing at the same time, the call and also the virtual meeting in English and in Portuguese. So we’re more efficient now. Yes and this cut the cost of our conference calls.

Well, let’s see if we receive more questions. Yes, we have another question. . Could you detail the strategy? How the company is financed, new loans, potential buybacks?

Osvaldo please. This would be better answered by you because you are responsible directly, so please.

Thank you. I will answer it the following way. The company has an intense process of refinancing in loans. We have tried to diversify the sources of loans apart from the debentures and with incentives we have sought multilaterals from the private markets. We had an operation at the end of the year, almost R$1 billion with BD investee in reals, not in foreign currency. Actually, this is the trend. The company guided by the Board and the council is trying to reduce as possible the exchange rate exposure. So our strategy is to diversify and anticipate the loans. Now, concerning potential buybacks, we will see this when opportunities arise. But certainly, the company does manage its debt and it can in the future maybe pay off the loans that are very expensive in relation to what the market is offering. The debts, we have almost all of them CDI, allow us to pay off the loans in advance but always after a period after the issuance. I believe that in general terms, this is it, reminding you that the company has access to public multilaterals. Recently, we received approval from COFIEX due for the next step for financing of $200 million that it’ll be in yens with JICA, the public bank that does international developments from Japan and this is also in our pipeline. So we have many loans from the public bid and World Bank. These may later be converted be reals. So we have a robust situation to guarantee the liquidity of the company and also guarantee the CapEx of the company to reach the goals and deliver the clean Pinheiros River on the date that Dr. Braga mentioned.

It seems that asked the question. And . I did not receive this question. I will read the question. I apologize. Journalist from . Her question details about my initial comments. SABESP does not wait to have rationing. What is the scenario for 2022? What levels you expect to have during the droughts?

During these years, we had three actions, three movements: one, to increase the infrastructure; second, reduce losses of water; and also to bring and also have conscious consumption from consumers. We were successful in these three. That is why, today, we can say that we have no forecast for rationing of water. We 1are, in November, we are expecting more rainfall this month of November, and also during December and January, which are the rainy months. There is a difference in climate forecasts between the institutes -- research institutes. Some saying La Nina, others do not foresee La Nina. La Nina means that we would have a dry summer. Otherwise, we would have a normal summer. So, there are uncertainties. What we have in terms of expectations is the average, what happens more frequently. And therefore right now, we are not seeing difficulties. Now, we will have no difficulties, if we have a dry summer, because we have alternatives to face a challenge like this one. We have experience to use technical reserves. We already use them. For your information Cantareira reservoir have technical reserve. The size of the full reservoir of Guarapiranga which is the third largest system producing water is a metropolitan region on São Paulo. Therefore we -- right now, we don't see the need for rationing water. Now, if we have a different situation. For example, in Franca we did this. Why? Because there next year, in the first semester, everything will be okay. It rained, we have no more problems. But when we had a more difficult situation it was necessary to ration the water. So, people could fill their water reservoirs in their homes for their basic needs. But we don't have this perspective in São Paulo. We don't see this as necessary in São Paulo.

Okay. Now, I received the question. Let’s continue. We have no further questions. Dr. Braga, let’s wait another three minutes to receive questions. And -- do we conclude, or do we wait more, Dr. Braga, Osvaldo?

So let’s wait another three, four minutes. And if we don't have the questions we can close the conference call. We have 106 participants in this meeting, and certainly those who had questions have already asked their questions. Okay. Well, Mario, I believe we have no more questions.

Yes, we have a question. is asking. Will you announce dividends?

Dr. Osvaldo.

Further dividends foreseen are the minimum and this will happen when we close our year-end report. We will define the company's profits and there is no -- we don’t intend to change this, 25%, which is the minimum dividend. We have a strong investment plan for -- according to new law and we want to really bring universalization of these services to State of São Paulo.

Very well. Dr. Braga and Osvaldo, we would like to close. So I will pass the floor to Dr. Braga for his final comments.

Well I’d like to thank all the participants. I would like to thank our Directors and our CFO, and I would like to say that we continue working hard on our challenges, especially to meet the goals and everything that is in the new law. We will continue in reducing costs, improving efficiency. So this is what our company intends to do in the near future, and all those who participated may -- be sure that we will make our best efforts for our results to be greater, both financially and in terms of the improvement of the standard of life of people that we serve, and we supply water and sanitation. Thank you.