Companhia de Saneamento do Parana Sanepar

BOVESPA:SAPR4

Earnings Call Transcript 2022-Q2

[Operator]

Good morning to everybody, and please be welcome to the 2Q 2022 Earnings Conference Call from the Companhia de Saneamento do Paraná SANEPAR. We inform you that this video conference is being recorded, and it will be available at the company's IR website, where the presentation will also be available. [Operator Instructions]

The presentation may contain forward-looking statements regarding Sanepar business products, estimates of the operating financial results and work prospects. These are in projections, and as such, are based solely on Sanepar's management expectations regarding the future of the business. And its continued ex capital in order to finance the company's business plan. Forward-looking statements are no guarantee to performance. Such forward-looking statements substantially depend on changes in market conditions, government group performance of the industry and the Brazilian economy, among other factors. In addition to the risks presented in the disclosure documents filed by Sanepar, the other first [indiscernible] without orders.

To start, we'll give this over to Financial Director and Investor Relations, Abel Demetrio.

[Abel Demetrio, executive]

Good morning to everybody. I appreciate your company here. We are with the presence of [indiscernible], but also are also with [indiscernible] and also our IR team, [indiscernible] and our end of these question.

And we'll now start the presentation on the Q2Q 2022 until June 2022, we have the highlights on the first semester. We have the growth of the income, net revenue growth of about 10 6%, EBITDA [ minus ] 6%, and the net profit [ decreased ] around 9.1%. We had in this time, an increase of 33,300 water connections. We had an increase of 27,900 sewage connections. We kept this. We have the service index 100% on water, and sewage 77.9% around this, on a least 12% to the universal states and about the service index. 100% of this product is treated by the company and about the increase in the investments.

And in the 2Q, we had this improved of BRL 411 million. Our EBITDA margins on the second quarter was 32.6%, and on the first half was 37.5%. And about the operational results, our volumes about sewage -- water, sorry. They had an increase of 6% in the last month and the economy, we had 334 increase of water, and we had 30,000 new accounts and 2.2% variation added volume increase compared to 2021. The sales increase, we had an increase of [ plus 6.7% ] . And it's going to be explained at the end of the rotation products.

The news that we have about the first quarter -- on the second quarter, it's about the reservoir levels. We had an average in Curitiba in the central area, above the averages. And it concludes that we had the -- almost 91% average volumes against the 54.86% compared to first half of last year.

Talking about the performance indicators. And we talk about the covenants of our debt debentures. We have the debentures on all of our products on the 8th, 9th, 11th and 12th issues of the covenant or the discovery of covenant [indiscernible] on this -- from the first half, we had -- we closed with 1.53%. And the EBITDA, the net financial expense, we ended with 8.44%. And the BNDES debentures, we had a net bank debt. And we had the EBITDA, net of the adjusted EBITDA, it closed with 1.63%. And with the net financial expense, we finished with 3.06 and the other onerous debt of EBITDA, we finished with less than 1. And with the other debt that's CAIXA contracts.

If you check about the provisions, the retirements, ecosystems, this financial -- this leasing because this. Some of the points we have to -- just in the net financial expense, we've closed with financial with [ greater than 1 ]

And if we check on the KfW contracts, we should have the covenants to check. We check about the debt. We check at that level, we end with 48.1%. And we check the ratio of our EBITDA margins, we finished with 37.5%. The ROIC finished with 11.7% against the 11.9% compared to the percent last year. And the ROE, and we had 14.1% compared to 14.5% of last year.

Our financial performance, we've checked the net revenue. It grew 10.6% compared to last year, and we grew BRL 2.766 million. In the EBITDA, we get more than BRL 1 million, negative of 6%. And the negative margin was about 37.5%. And the net margin profit had a decrease of 9.1% and 19%.

And the operating costs and expenses had an increase of 23.8%. And cash generation with conversion, we had some events that made an impact on the results. But we had BRL 911 million in 2022, a 21% increase compared to last year. And the conversion of almost more than [ 8% ].

Net debt and leverage. We had a long-term leverage. We had BRL 3.138 million, right hand column on the first half and the second half.

And if we check about the weighted average cost of debt, we had the 12.6% compared to the last year. And we've checked this average cost, about 12.6%. We have about the taxes and net income. And it changed from 10.5% to 12.6% registered right now.

Our CapEx, we had concluded BRL 764 million at a variation of 38.3% compared to the first 6 months of last year. And on this last quarter, we had an increase of 42%. This CAPEX was provided with water, 42%, sewage 52% and other investments, 6%.

And it comes to the income statement. In the quarter, we had a net revenue. Checking about all the factors that checking about this 6.7%. And it started at May 17 and get into really all the results for. And on the last quarter, it was integrating.

And about the personnel, we had an increase of 15.4%, impacted our salary adjustments. We had to check -- some factors affected this hiring and the variation checked about this. And the materials, we have an increase of 37.7%. And electricity. On the chemical products, it had a great increase on this. And about the increase of the dollar inflation and about the consumption of, also an increase of the construction of some products and the operational situation of the treatment of the sewage of the company.

And it was -- as of the last quarter. And we had to use some more chemical products in this period because of the range that occurred on the last quarter. And electricity is a recurring growth. And we had the increase of 18.3%. Also with the impact of the readjustments on last year. The databases happened last year. The main supplier of [ compared ] in June.

So last year, we had an increase of -- we had an adjustment of 10% compared to last year in more subsidies, plus 3% about the fees and the fees that were practice. And they had part of these numbers. These are the main factors that made the cost of energy had this increase of 18.3%.

About the third party services, and we had 41%. About the microregions about the additives that happen within cities, yes. We had to add these. We had a limit to check about this, about the cities and the states, about 21%. And about the rules given by the company about the subject.

And for the civil, work, environment, fiscal, tax provisions, we had a rate increase for -- and we are also checking about health care and social security provisions, we have 37.1%. Also some more work provisions that help providing these numbers to be so high.

Another highlight point are the other costs and expenses. If you check about the acknowledgment of the loss of some credit results given that we have some people that they don't pay our [indiscernible] and we have check out BRL 32 million. Yes, this is -- they have this increase check in the 6 months, last 6 months, income statement.

If you checked the first quarter, we had an increase of 10.6% checked compared to the other one we had to. We had 29% of material. Electricity, we had also 19% and also highlighted -- an average of 75%. And we check at the end of the day, we had 20.9%. We've accumulated all the points.

On the last quarter our income statement, our net profit, we have [indiscernible] BRL 5 million in the last quarter [indiscernible] Our net profit will be around BRL 230 million compared to the last one. And our EBITDA margins will be around 37.5%. It will be -- it will make our EBITDA margins to around about 39%, some -- a little bit below about the 41% compared to the last quarter, but the nonrecurring just EBITDA margin.

And just trying to check about the adjusted EBITDA with the non-manageable items. We have EBITDA about BRL 1.038.5million. And non-manageable items, we had BRL 128.9 million. And the electricity, BRL 72.3 million; treatment materials, BRL 17.4 million; and BRL 39.2 million about fees and charges. They don't have full coverage, but it gets on the next readjustment, on the next database that may be on next year's April and will start on May. They would have this coverage. It would be -- it would make our EBITDA margin change for 37.5% to 42.2%.

About the balance sheet, we had a net debt -- we had an increase of 10.5%, which is [ BRL 7 billion ]. Cash and cash equivalents, financial investments, we had 26% comparing to the last year's first half.

And about the loans, financing and debentures, we had a variation. We had a change from BRL 4.120 million to BRL 4.829 million, a variation of 17%. And accounts receivable from customers net, we had a variation from 26.9% to 5.4% being represented on [indiscernible]

To check about the investments and all the results on the other asset liabilities, we had a variation of 38.3%. And we had about the contract assets, a variation from 14.4% to 22.9% in 43 days, yes.

And cash flow, our position right now. We had an increase in improvement about the activities that we had about BRL 11 million and 21.1% of variation about operation activities. About the net profit of the adjusted, our investment activities we had of 765 and of 38.3%. In financing activities we have talking about loans and financing we had a variation of 27.7%. And about dividends interest on equity payment, financing payments, we had on the end an increase of BRL 260 million. We passed from BRL 983,000 million to BRL 1,233,000 million at the end of the period.

This is the presentation of the first half of 2022 that ended in June. I'd like to thank you. I would like to thank for the friends and the Finance Director.

And now we're going to start with the following parts of the presentation.

[Operator]

[Operator Instructions] The first question is from [indiscernible] from Citi.

[Unknown Analyst]

[Technical Difficulty]

[Operator]

It looks like -- has a problem with his microphone. I'm going to read his question.

I'm a company investor. I have some questions. First, will present -- the expenses presented on the first -- on the last quarter, they showed up a rate increase. The company and about work provisions. There is any other prediction of the future expenses that the company didn't check yet?

[Claudio Stabile, executive]

Thanks for the question. Right now, we come from a time that on the last 6 months, we had some reflexes. Also about the quarter and the semester about some costs. And we have to check this. Each company, we have a database to present these adjustments -- main contracts. We should say like this.

On our situation, something that affects the company, it's about salaries, not only about the company but about all the companies. Since our database is about March, we have a new adjustment about with the inflation. And it must -- it impacts about the cost of the period.

If you check about the cost of energy, it had a significant increase. And it happens because of the increase that we had on -- we had last year [indiscernible] database is June, an army supplier, energy supply. They had an approved adjustment -- of 4.9% since the company uses like the retention energy. It goes -- it reaches above 9%.

You talk about the discounts on the -- discounts, it gets around 3%, 4%. And by the other hand, we had a reduction on the liquid only [ SMS ] from 18.9% and it gives a reduction of 13% when we check it on the end of the day. And when we do this, we are almost like underlying on the same level.

[Operator]

And this adjustment on this period of time?

[Claudio Stabile, executive]

It's really like really near close to 0. But some other factors can happen again. And that's a point that we must -- it may happen to increase the cost of the energy in the company. We had some provisions on this period that happened about working. Everything that happened right now with the company, with the additional processes and they had like some accounting loss.

And we must have new provisions to help with the following of the law. What must be done, it happened. And of course, our decision is being favored or not, but you're going to check on a few months. But right now, we can't predict what's going to happen in the next few months.

On the chemical products, sorry. It's something else that also had a significant increase. Even it's going to be on a lease. But we're trying to get the smallest cost possible, but without a doubt, treating with the restrictive treatments that happens and about the environmental laws that we have. We have to renew our licenses, our loss. We have a reduction of some parameters of the treatments and they must improve.

And if you check about the consumption of chemical products and the increase of the products, it was general on the first semester. And it had an impact, but we expect that we have more reasonable effects and numbers on the future. But it's not under control -- and then it must be done. Check about the laws of the country.

[Operator]

Our next question comes from Carolina Carneiro, Credit Suisse.

[Carolina Carneiro, analyst]

I have some questions. There's going to be three questions. The first one is about the company -- it's been taking care of the increase of the -- not paying the costs in the water companies. We had a trouble problem on these first quarters. And it happens to everybody, not only to your company. What's the strategy do you think to do in the future to try to hold on the debt and about on the cost?

The second question is about the increase of the fees on the city funds. If it can be compensated on the future or if it stays on the limit regulated by the law or if the company can try to negotiate some of this increase or compensation.

And the first question -- third question is about Maringa. If we have some news about this, about the negotiations.

[Claudio Stabile, executive]

Okay, then. Carolina, thank you for your questions. First, the company, it's been taking care about the debt of the customers that are not paying yet and the COVID had a great impact on this. And the power that the company has -- the families have to pay the bills. But we have -- and because of this, we had this increase of the debt of the families of the [ Brazil ], but it was less than 5%. But on the beginning of this year, it was a little bit higher.

And starting July, we're going to have a new program to try to recover these credits. And it's going to happen to try to find negotiation with the customers who pay to be like regular, to be even with the company. We don't have a first cut of how this is going to happen. We have a 6-month period to think about this -- implement this. We're going to do this to recover credit and be clear. But of course, it depends on chemical issues and how this going to happen.

And of course, depending on what the result is going to be, some other measures will be made necessary to help it happen.

[Unknown Executive]

Carolina, thank you. We have some effects about this market. I don't know, especially we are finding that -- reaching the effects of the costs. And we are now reaching about 6% of people out of the unemployed, 6% of people unemployed in Parana. And I believe this -- leave that it starting July, it's going to start having an effect -- not only about water but on electricity as well. We have the situation, and we have also, of course, supports of the unit. It's part of the unit. That will contribute also to Andes.

And the first bills that they pay, they are always electricity and water, yes. And our situation in sewage and we do have an very good expectation of the decrease of the debt, mainly talking about credit recovery.

And please, moving ahead, if I can to Maringa. We are still discussing with the [ STF ] about this. When you talk about this. But there's -- we have nothing like closed right now. And right now, working right now, discussing -- trying to consolidate with the [ STF ]. And until it's not like concluded, decided, we can't give a position right now. Final position, our exact position on what's going to happen.

And relating to the -- your question about the city costs. And we had the registry of BRL 41.5 million. And we have some goals, some deals that they were like cited right now. And the new rule to -- now, sorry, and also has increase of 2%. And the council that also limits this coverage, just 2% and it has some variables as well. And yes, [indiscernible] it was later with them. And this coverage is going to be able to get -- and it's going to get a coverage on these fees right now like this.

And with this new rule, we have to be cautious on this situation right now. If it follows up the limits that the company gave us, if we have to the -- a lot of creations, controls and everything that they -- keep continuing.

[Operator]

The next question comes from -- investor from Sanepar.

[Unknown Shareholder]

[Technical Difficulty]

[Operator]

It looks like -- has a problem as well. I'm going to read his question.

What's the impact of losing water in the results and [ mother ] company has been done to minimize it? That was the question.

[Claudio Stabile, executive]

Thanks for your question. Really, yes, in fact, right now on the last quarter and the last few years, we were checking. We are noticing a reduction of our water loss. There were some losses that happened, but it has been -- it was reducing right now by the time. But we were working on rotation in Curitiba in the central area. And it locates on smaller losses.

And about the growth that we had on this first semester, it happens because the normality -- we went back to normality. And the efforts of the company trying to control these losses, constantly being worked out of the company, about the levels that they were identified where it's most important to make these incentives, make these investments and where we have to work more -- like more closely.

We have this operational methodology to work with this. I don't know if it wants to come on this question -- something.

[Unknown Executive]

Yes, about the loss of Sanepar, about the loss of the company researching on all these projects. We are trying to find an economic investment that it must returns -- we have some water -- as well. It's not about the pressure -- and the loss and it was expectation where they have also trying to sign points that they're still in the water. And we have some -- we had to hire some -- performance check about this point about this.

And we are investing as well, but we are searching for something return as well. It's good to talk about as well. And what the director told about these performance contracts, about the losses, it's something new to the company.

It's not even 1 year -- it's not 1 year of contract as well this contract -- it has some effect also. It already has an effect, but of course, but these are actions of medium term contracts. We're expecting for results, we'll see these numbers for us to have a return on these investments because sometimes there are some investments that are -- they don't pay itself. They don't play themselves.

So we have to be cautious about it. And we try to achieve smaller loss. But sometimes it's not worth it because it won't pay itself. It won't have -- they don't have these results about the losses.

But of course, we look on the whole of the company on the -- and we believe about this. And we believe that about next year, we believe next year we are going to have numbers to tell about these hirings and everything that we are preparing, searching even out of the country, searching for results. And we're going to have really good meaningful results compared to what we have right now, complementing as well these actions.

They're going to be changing the hydrometer and also to change the sewage system. Of course, our main sewage areas, they have 59 years. But we have some points that they have like more than 100 years. And we are working that we're going to work with this loss reduction.

[Operator]

The next question comes from -- buy-side analyst. We are now -- we're going to read your question.

I have a follow-up on the loss answers. The loss increase was greater than the volume increase. By the end of the rotation, exactly why it happened.

[Claudio Stabile, executive]

Okay. Let me talk about this. The great level that we have on the -- crisis about rationing. We work with some pressures around 10, 15, 20 of water columns and when we lose this water -- and we want to -- this increase is not pressure. So we have -- increase of this last year.

And turning on, turning on, turning off these pumps and the water interaction, the sewage. And it generates like small leaks that we couldn't even notice. And when it happens a lot, this lease increase. So we have to check more about this. And that's why we had these contracts.

They had a performance analysis to try to find this. And when we see on the big situation, it increases the number that we work on what we expected of losses, of course.

[Operator]

The next questions is from -- I'm going to read his question.

Regarding the next step of the fee adjust. Sanepar is positive thinking that -- is going to take consideration of the increase of cost of the company, and it will compensate Sanepar.

[Claudio Stabile, executive]

About the fee adjustments, we have 2 events that we have to like separate. The first one is the conclusion on every reductions. Right now, we are elaborating incremental numbers of 2016 to in 2020. We are on the field checking out the numbers about the conclusion on the second step of the -- and later, with these results, we're going to check all the results, all the staff in the product. It's going to be adequate with the methodology that we believe in. It's going to work. On our database, that ends on April 17, 2016. That's going from the agency.

And the second point is about the costs that we have the company annually we don't check about the years. We have the years that we have these adjustments, like lease #1, #2, #3 and about each step of the rapid bills, yes.

We have 2 alignments checks. The company right now is -- it's working with all our efforts from all points. And all our priorities today are we give you work -- we are working firstly to conclude everything right on this period in this time right now.

And we have the adjustment methodology. It's going to be -- it's chosen by the company. And it's technically -- so yes, right now in Sanepar, it's finishing these problems right now, yes.

And about the active basis and it depends on evaluation criteria. We are on our second [ RGB ]. And it depends the company had another priority. They have more knowledge on the -- we have more knowledge on the theme at the time. And the questions they become more and more complex.

When you check about rule, it's always getting higher, and higher, and higher about the scheme, but with the scheme and its regulations. And we are working right now in the last few months and at nights, Saturdays, Sundays to deliver these products to the agency. And then right now, we're going to work to define the fees.

[Operator]

[Operator Instructions] The next question comes from [indiscernible] sell-side analyst from [indiscernible].

[Unknown Analyst]

I would like to know furthering the contract renewals are being made. And if the law hasn't impacted what would it be?

[Claudio Stabile, executive]

The law -- right now, the law, it doesn't allow the renewals. We have to follow the contracts right now. And the urgency of this contracts. And there's nothing that can be done about this.

And when we get to the end of this contract, the CD, it must work with the renewal contract term after it ends or we hire another group with the law right now. But it doesn't allow -- the law doesn't allow an automatic renewal. The law doesn't approve.

[Operator]

The next question comes from -- an investor.

[Unknown Shareholder]

I'm investor in Sanepar. Why the company has the debenture politics so complicated. Why only pays like one time a year and it doesn't have like the money adjustments. What are the policies?

[Claudio Stabile, executive]

And the number by law, it's about 25%. It's about 25%. It's being cited by the assemblies. And the companies -- like others on the company, we are regulated to work like early companies. And it's a company that the company adopts. It's not like an isolated thing from the company once it is for all the confirmations we have. And we show all the information each semester each year about the numbers, yes.

And always after the assembly approves the confirmation on the results. And up to 60 days, we pay out of our debt. And since we are aligned with all the other companies, a lot of other companies right now, and of course, with the inflation that's happening right now in the world, but it's not going to be -- it's not being updated.

But the company stays with the company. They are from the shareholders. And we use these resources to define its activities.

[Operator]

[Operator Instructions] Moving on the next question comes from Daniel Hansen, an investor.

[Unknown Shareholder]

And about the materials and electricity. Looking at the next semester, what do you see in the future about this and about the energy. We -- it has some like actions, some ideas of main production or any other mechanism that can decrease this pressure.

[Claudio Stabile, executive]

Thanks for the question. About the materials, we can't make any projections, but we have some expectations that on the inflation, the inflation they go to lower numbers. From our projections, we have really high standards and would have some benefits of increasing some -- yes, marginal benefits, yes. With chemical products we don't have a lot of control about this to make coverage of it. To produce and check and about water sewage. It's something that we do, and we must do with the treatment adequate treatment. And it represents about 55% of all the costs and impacted a lot of these. But that's item that on lease.

We have some actions to reduce these costs. And we're working fiercely to control this in what is possible. We are talking about the materials, cheaper materials or some contracts to make it cheaper with more efficiency. We are going to do more with less. I know it's this expression, but that's what -- that's our attempt to these numbers -- electricity and what we can say. Our database is about June 24 of our main supplier of the company. That's Copel. Our adjustments are already given and this is public, these adjustments. And what is going to happen versus the reduction of the that is public as well.

And we are a little bit more comfortable with the adjustment itself in the prices. Of course, with the flags, they may change about the -- points, how it's going to work out, They're going to control it. They're going to establish it with everything. This is going to be analyzed the group. But that's a scenery that's a better scenery than what we expected. And we only had like a big adjustment expectations on our scenery. And these are the main elements and please complement.

So remembering that we are waiting for the moment to right now advance on the market on the planning market, when it's going to be checked with the major parts that some prices were really elevated, yes, very high. And now we got on the lower prices that we can advance on, on this way of buying the electricity.

This side of what we talked about next advance, next format. It's not like hydroenergy, biogas. But it works sometimes -- with we are working with -- it's a -- median terms. We have everything ready. We have everything on route to work with the consumers, including with its contracts to maybe check again and approve the administration council. And I believe that on the next quarter, we are going to have at least one new about the market.

[Operator]

The next question comes from -- an investor.

[Unknown Shareholder]

I'd like to ask if there is any contingency plans of the costs with staff talking about the salary adjustments too high with the inflation.

[Claudio Stabile, executive]

Thanks for your question. This question is about the management, the managing being the staff. We also check about this, about the extra hours. And everything we check and we alert our supplier about these resources, human resources.

And about the repair, the adjustment of the databases, it really impacted on -- but it's also altogether with the deals that were signed off on every possible aspect. Like everything that we did on the best, we have some products like retirement and everything.

And about the manageable costs, we are working to reduce the impact when we have the costs. They are including with some action working actions to get hire staff with a scenario analysis to bring to something more tangible to the company's numbers.

[Operator]

The next question comes from -- again. I'm going to read his question.

And referring to the new sewage point. The company understand that on the general context the rate investment there will be positive return for the company on the next years and is it possible you act on other [ federation fields ]. Each hypothesis can be considered like possible or manageable.

[Claudio Stabile, executive]

Can you please repeat the question?

[Operator]

About the new market sewage, the company I understand that on the general context, the great investment, the big investments. There will be a positive flow for the company in the next few years about the possibility to act on other [ federation fields ]. Such a hypothesis can be considered possible or manageable?

[Claudio Stabile, executive]

Really about investments, yes. We have the expectations of the market to grow up. And we are working with -- we have about 78%. But we must achieve 90% for this to happen. And this is going to bring benefits.

But we are working attempts to -- for example, that we are working right now, we are consulting -- please, I invite you guys to be a part of this assembly on next -- August 8. When you're going to check about this, we are searching, trying to improve the efficiency and to improve the investments with everything that's been working right now.

So we are launching this [ PPA ]. It's happening on the metropolitan area -- and this is the main goal that we are going to try to work to achieve all the results.

And what these opportunities give to us. We have 3 macro regions, and we did with the first region right now. And now we're going to do with the next 2 regions. And we're going to do -- further areas as well, other areas as well.

And it makes it possible because we have our authorization -- the law with the state since 2 years ago that we can work not only out of the state but also out of the state. But clear that before every investment, every -- of our territory. But before we work out of the country, we must make our house ready. So as soon as it happens, we off course is we're going to work outside and supporting and the company is prepared to act like this out, out of Parana.

[Operator]

The next question comes from -- investor.

[Unknown Shareholder]

I'm a Sanepar investor for some time. And my question is about the stock prices. Since March of 2020, when we has a pandemic, the price, it had a great rate increase. And so far, it could return the numbers of February of 2020. The price is low, between 18%, 21%. And we couldn't recover the numbers of 2020, 2021 that had achieved at the time.

And on this subject, what I'd like to know what are the strategies that the company has to recover these numbers for Sanepar.

[Claudio Stabile, executive]

Thank you for the question. That's a tough question. We are working like this, going back a little back on time. Trying to remember, we got a hydro crisis that we never -- that it happened in history for more than 50 years. And of course, it got a reduction on the volume intensity and less sales of water.

And by your hand, the company also as well, but constantly, the company, the state, the people, they went through COVID. And it never happened on this level for the company, for the country as well.

These are 2 factors, really important factors that contributed to preserve the company so that for -- and with these facts, the results and -- marks that we have to recover this. All the adjustments that we have to take to support this and remembering, if we don't achieve these spots, we lose our contracts. We lose everything.

So the law says that if we don't achieve our goals, they are going to be provided with all the stockholders, yes. We had a problem. We had a reduction of these numbers. And these obviously with the investor that invests, waiting for a return. And he goes to options that it pays more dividends, but the company were at least they're investing. They're doing our homework to give a company to show a company much stronger with environmental issues, of contract issues with all our powers, with all the cities and trying to generate some results.

The company is going to -- being understood in that the company is being worth investing on and have a lot of sectors, a lot of points to check on the best. We were always profitable. We never had a negative period.

And that's the message that we have to send you. And everything that we invest, everything that we work on with the regulations that we have available here on Parana. It's a little bit recent, but it's going to be bringing safety to all our investors.

And since -- like I said, we've been through 2 moments really drastic. These are exceptions. At the same time, so it has a great impact, big impact. And it affects the [ Heidrick ] station. And the pandemic, it affected our customers. In affected the people, the companies further reset are known they didn't hire anymore. And there's unemployment of the city, the country. It happened.

But we are working to take it back. Brazil is working for this take-back. This is our goal. This is the company's goal, but we can forget about this. And it's like really recent, and we are recovering. And this recovery is not going to be like this fast.

And what we talk about the PPPs, they are going to have really good results about this because of this as well, these points as well because we are going to have a big recovery, serious recovery with efficiency with the effort of the companies for all the customers in that providing this product build service. We're going to work with other -- of course, with partnerships with public partnerships or private partnerships. Sanepar has been looking for this kind of market as well.

[Operator]

Without having further questions, we are now going to end the Q&A session. And we're giving the word back to Financial Director, Investor Relations, Abel Demetrio for his final statements.

[Abel Demetrio, executive]

Thanks for everything, for your participation. We hope that you have a great day and a great week. See you.

[Operator]

The conference call for 2Q 2022 of Sanepar is now closed. Thank you very much to all the participants and have a nice day.