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Risk management (Tables)
 12 Months Ended
Dec. 31, 2024
Risk Management  
Schedule of exposure to exchange risk
       
 

December 31, 2024

December 31, 2023

 

Foreign currency (in thousands)

R$

Foreign currency (in thousands)

R$

         
Borrowings and financing – US$ 303,978 1,882,323 280,188 1,356,474
Borrowings and financing – Yen* 36,787,581 1,486,394 41,078,385 1,405,702
Interest and charges from borrowings and financing – US$   24,030   15,510
Interest and charges from borrowings and financing – Yen  

8,364

  

8,167

Total exposure   3,401,111   2,785,853
Borrowing cost – US$   (42,510)   (37,520)
Borrowing cost – Yen  

(2,236)

  

(2,442)

Total foreign-currency denominated borrowings (Note 18)  

3,356,365

  

2,745,891

(*) Debt in Yen measured at fair value as part of the hedge contract, as detailed in Note 5.1(d).
Schedule of prices exchange variations
     
 

December 31, 2024

December 31, 2023

Variation

US$ R$ 6.1923 R$ 4.8413 27.9%
Iene R$ 0.03947 R$ 0.03422 15.3%
Schedule of scenario of effect on the income statement
 
 

Probable scenario

  (*)
Net currency exposure as of December 31, 2024 in US$ - Liabilities 303,978
   
US$ rate as of December 31, 2024 6.1923
Exchange rate estimated according to the scenario

6.0000

Difference between the rates 0.1923
   
Effect on the net financial result R$ - (loss) 58,455
   
Net currency exposure as of December 31, 2024 in Yen - Liabilities 36,787,581
   
Yen rate as of December 31, 2024 0.03947
Exchange rate estimated according to the scenario

0.04183

Difference between the rates (0.00236)
   
Effect on the net financial result R$ - (loss)

(86,819)

   
Total effect on the net financial result in R$ - (loss)

(28,364)

   
(*) For the probable scenario in U.S. dollars and Yen, the exchange rates estimated for December 31, 2025, were used, according to the Focus-BACEN and B3’s Benchmark Rate report, of December 31, 2024, respectively, excluding the effects of hedge contracted at the end of 2024, according to Note 5.1 (d).
Schedule of borrowings and financing subject to different inflation adjustment indices
   
 

December 31, 2024

December 31, 2023

CDI(i) 15,250,135 9,966,111
TR(ii) 1,683,342 1,684,711
IPCA(iii) 2,982,735 3,038,378
TJLP(iv) 1,067,436 1,365,806
SOFR(v) 1,882,325 1,356,473
Interest and charges

572,399

392,906

Total

23,438,372

17,804,385

 

(i) CDI – (Certificado de Depósito Interbancário), an interbank deposit certificate
(ii) TR – Interest Benchmark Rate
(iii) IPCA – (Índice Nacional de Preços ao Consumidor Amplo), a consumer price index
(iv) TJLP – (Taxa de Juros a Longo Prazo), a long-term interest rate index
(v) SOFR – Secured Overnight Financing Rate
Schedule of credit risk
     

Banks

Fitch

Moody's

Standard Poor's

Banco do Brasil S/A AAA(bra) AAA.br -
Banco Santander Brasil S/A - AAA.br brAAA
Brazilian Federal Savings Bank AAA(bra) AAA.br brAAA
Banco Bradesco S/A AAA(bra) AAA.br brAAA
Banco Itaú Unibanco S/A AAA(bra) AAA.br -
Banco BV - AA+.br brAAA
Banco BTG Pactual S/A AAA(bra) AAA.br brAAA
Schedule of rating assessment
   
 

December 31, 2024

December 31, 2023

Cash and cash equivalents and financial investments    
AAA(bra) 4,186,146 2,940,690
Others (*)

1,196,154

324,546

  5,382,300 3,265,236

 

(*) As of December 31, 2024, this category includes R$ 298 (R$ 322,241 as of December 31, 2023) referring to Banco BV and the amount of R$ 1,195,511 referring to Banco Santander (as of December 31, 2023 – R$ 1,680), current accounts, and financial investments, which are not rated by Fitch.
Schedule of liquidity risk
             
 

2025

2026

2027

2028

2029

2030 onwards

Total

As of December 31, 2024              
               
Liabilities              
Borrowings and financing 5,486,592 6,993,902 4,148,835 3,247,705 3,697,777 14,911,951 38,486,762
Trade payables and contractors 766,609 - - - - - 766,609
Services payable 1,438,507 - - - - - 1,438,507
Public-Private Partnership – PPP

452,323

470,080

487,400

505,288

523,832

5,918,847

8,357,770

Total

8,144,031

7,463,982

4,636,235

3,752,993

4,221,609

20,830,798

49,049,648
Schedule of gains and losses in the financial result
           

Operation

Currency

Financing

Notional Value Yen/US$ (thousand)

Fair Value of the Asset Position

Fair Value of the Liability Position

Gain / (Loss) with Derivatives – Swap settled on December 12

1 Yen JICA 15 CONS 3,927,290 156,198 136,392 19,806
2 Yen JICA 15 WORK 1,834,860 73,140 63,867 9,273
3 Yen JICA 17 WORK 2,559,546 101,391 86,138 15,253
4 Yen JICA 17 CONS 616,110 24,365 20,699 3,666
5 Yen JICA 18 WORK 1,781,080 70,982 62,084 8,898
6 Yen JICA 18 CONS 3,399,720 135,197 118,310 16,887
7 Yen JICA 19 WORK 20,139,925 800,653 711,620 89,033
8 Yen JICA 19 CONS 2,529,050 100,013 88,888 11,125
Subtotal    

36,787,581

1,461,939

1,287,998

173,941

9 US$ IDB 1212 10,278 63,456 55,282 8,174
10 US$ IDB 4623 156,958 921,231 803,855 117,376
11 US$ IBRD 7662-BR 57,848 353,395 311,524 41,871
12 US$ IBRD 8916

78,894

376,478

338,041

38,437

Subtotal Currency  

303,978

1,714,560

1,508,702

205,858

Total

3,176,499

2,796,700

379,799
Schedule of operations outstanding
                 

Operation

Currency

Financing

Notional Value Yen/US$

Fair Value of the Asset Position

Fair Value of the Liability Position

Fair Value, Net

Gain / (loss) with Derivatives- swap from December 12 to 31

Derivative instruments – swap designated as Cash Flow Hedge

Fair Value

1 Yen JICA 15 CONS 3,927,290 154,834 156,205 (1,371) (1,371) - 326
2 Yen JICA 15 WORK 1,834,860 75,069 73,013 2,056 2,056 - (2,550)
3 Yen JICA 17 WORK 2,559,546 105,119 101,762 3,357 3,357 - (4,027)
4 Yen JICA 17 CONS 616,110 25,302 24,476 826 826 - (984)
5 Yen JICA 18 WORK 1,781,080 70,242 70,869 (627) (627) - 153
6 Yen JICA 18 CONS 3,399,720 134,034 135,221 (1,187) (1,187) - 282
7 Yen JICA 19 WORK 20,139,925 823,242 800,959 22,283 22,283 - (27,597)
8 Yen JICA 19 CONS 2,529,050 99,813 100,460 (647) (647) - 9
Subtotal    

36,787,581

1,487,655

1,462,965

24,690

24,690

-

(34,388)
9 US$ IDB 1212 10,278 65,698 62,314 3,384 - 3,384 -
10 US$ IDB 4623 156,958 972,082 951,770 20,312 - 20,312 -
11 US$ IBRD 7662-BR 57,848 355,973 350,680 5,293 - 5,293 -
12 US$ IBRD 8916

78,894

492,665

478,904

13,761

-

13,761

-
Subtotal    

303,978

1,886,418

1,843,668

42,750

-

42,750

-
Total

3,374,073

3,306,633

67,440

24,690

42,750

(34,388)

Cost of hedged instruments reclassified to other comprehensive income

-

-

-

-

(55,402)

-

Other comprehensive income

-

-

-

-

12,652

-

Deferred income tax and social contribution

-

-

-

-

(4,302)

-

Other comprehensive income - net

-

-

-

-

8,350

-
Schedule of sensitivity analysis on interest rate risk
   

December 31, 2024

Indicators

Exposure

Probable scenario

     
Assets    
CDI 5,659,878 15.4100%(**)
Financial income   872,187
     
Liabilities    
CDI (15,250,135) 15.4100%(**)
Interest to be incurred

 

(2,350,046)

CDI net exposure (9,590,257) (1,477,859)
     
Assets    
IPCA 17,601,626 4,9900%(*)
Operating revenue   878,321
     
Liabilities    
IPCA (2,982,735) 4,9900%(*)
Interest to be incurred   (148,838)
IPCA net exposure (14,618,891) 729,483
     
Liabilities    
TR (1,683,342) 0.0191%(**)
Expenses to be incurred   (322)
     
TJLP (1,067,436) 7.9500%(*)
Interest to be incurred   (84,861)
     
SOFR (***) (1,882,325) 4.1870%(**)
Interest to be incurred   (78,813)
     
Total expenses to be incurred, net  

(912,372)

   
(*)   Source: BACEN and LCA of December 31, 2024
(**)   Source: B3 of December 31, 2024
(***)   Source: Bloomberg – Hedged by financial instrument
Schedule of capital management
   
 

December 31, 2024

December 31, 2023

     
Total borrowings and financing (Note 18) 25,258,297 19,536,350
(-) Cash and cash equivalents (Note 7) (1,682,606) (838,484)
(-) Financial investments (Note 8)

(3,699,694)

(2,426,752)

     
Net debt 19,875,997 16,271,114
Total equity

36,928,054

29,857,376

     
Total (shareholders plus providers of capital)

56,804,051

46,128,490

     
Leverage ratio

35%

35%
Schedule of estimated fair values of the financial instruments
       
 

December 31, 2024

December 31, 2023

 

Carrying amount

Fair value

Carrying amount

Fair value

Cash and cash equivalents 1,682,606 1,682,606 838,484 838,484
Financial investments 4,468,751 4,468,751 2,426,752 2,426,752
Restricted cash 37,715 37,715 54,944 54,944
Trade receivables 4,222,355 4,222,355 3,856,723 3,856,723
Instrumentos financeiros derivativos 67,440 67,440 - -
Water and Basic Sanitation National Agency – ANA 1,993 1,993 2,673 2,673
Financial asset (indemnity) 17,601,626 17,601,626 - -
Other assets 230,900 230,900 196,065 196,065
Schedule of financial liabilities
       
 

December 31, 2024

December 31, 2023

 

Carrying amount

Fair value

Carrying amount

Fair value

 Borrowings and financing 25,258,297 26,362,590 19,536,350 19,950,055
Trade payables and contractors 766,609 766,609 456,215 456,215
Services payable 1,438,507 1,438,507 750,732 750,732
Program contract commitments - - 34,016 34,016
Public-Private Partnership - PPP 3,306,219 3,306,219 3,286,614 3,286,614

 

The criteria adopted to obtain the fair values of borrowings and financing are as follows:

 

(i)Agreements with CEF (Brazilian Federal Savings Bank) were projected until their final maturities, at the average interest rate plus TR x DI and the average contractual term, were adjusted to present value by a funding rate specific for the Company in similar contracts, plus TR x DI, on the end of the reporting period. TR x DI rates were obtained with B3.

 

(ii)The debentures were projected up to the final maturity date according to contractual rates (IPCA, DI, TJLP or TR), and adjusted to present value considering the future interest rate published by Brazilian Financial and Capital Markets Association (ANBIMA) in the secondary market, or by equivalent market rates, or the Company’s shares traded in the Brazilian market.

 

(iii)Financing – BNDES corresponds to instruments valued at their carrying amount restated until the maturity date, and are indexed by the long-term interest rate (TJLP).

 

These financings have specific characteristics and conditions defined in the financing agreements with BNDES, between independent parties, and reflect the conditions for these types of financing. Brazil does not have a consolidated market of long-term debts with the same characteristics of BNDES financing; thus, the offering of credit to entities in general, with such long-term characteristics, is usually restricted to BNDES.

 

(iv)Other financings in local currency are considered by the carrying amount restated until the maturity date, adjusted to present value at future market interest rates. The future rates used were obtained on the website of B3.

 

(v)Agreements with IDB and IBRD were projected until final maturity in origin currency, using the contracted interest rates plus Secured Overnight Finance Rate (SOFR’s) future rate, obtained with Bloomberg, adjusted to present value using the exchange coupon curve obtained with B3, plus future Treasury Financial Bills (LFT), disclosed by ANBIMA in the secondary market. All the amounts obtained were translated into Brazilian reais at the exchange rate of December 31, 2024.

 

(vi)The contracts with the JPY + (YEN) index are projected until final maturity in the original currency, using the contracted interest rates, translated to the Brazilian real through the JPY/BRL forward rate (NDF) for the term and adjusted to present value using the interpolated DI curve, obtained from B3, and the accounting value is the same as the fair value. Additionally, for hedge accounting purposes, the IRR (Internal Rate of Return) at inception is used, calculated at the moment of designation.

 

(vii)Lease and finance leases based on IFRS 16 correspond to instruments valued at their present value. Thus, the Company discloses the amount recorded as of December 31, 2024 as market value.