Good afternoon, ladies and gentlemen. At this time, we’d like to welcome everybody to SABESP Conference Call to discuss its results of First Quarter of 2020. The audio for this conference is being broadcast simultaneously through the Internet on the website, https://www.sabesp.com.br, where you can also find the slideshow presentation available for download. We inform that all the participants 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 Rui Affonso, Chief Financial Officer and Investor Relations Officer; Mario Sampaio, Head of Capital Markets and Investor Relations and Marcelo Miyagui, Head of Accounting. Now, I will turn the conference over to Mario Sampaio. Sir, you may begin the conference call.

Okay. Thank you, everybody to join us on this conference for our first quarter 2020. As usual, we have some slides. Let's go through them and then we're open for question and answer.So let's move to Slide 3. Here we see a 2.6% growth in total billed volume of water and sewage in the first quarter of the year. The total billed volume increased 2.2% of which 2% in water 2.5% in sewage, this is compared to the first quarter of '19 and without considering the municipality of Santo Andre. The increase was chiefly due to the residential category which moved up by 2.7%. This is mainly in the metro region of San Paolo with emphasis on the balancing of San Paolo and [Indiscernible]. As for the municipality of Santo Andre, as you remember, we service on our wholesale basis, up to first quarter '19 and we have been servicing since August 2019 on a retail basis.The drop in billed water volume is natural at the beginning of the retail operations. Since the losses in the distribution systems are not recognized by SABESP. On the other hand, there is a relevant increase in the volume sewage treatment in Santo Andre as we did not operate the system at all before we took over.It was possible also to notice an increase in volume in the residential category in almost all the municipalities operated and a trend of greater increase in satellite savings both from San Paolo and in other cities that are regional centers in the interior land and coastal lines we operate.Although it is not possible to observe significant impacts on volumes for this quarter due to the isolation measures adopted at the end of March. We noticed a reduction in the volume billed in the industrial and public categories of 2.2% and 1%. The reasons for the fact it was volume not been significant due to the isolation is that only the accounts that were read at the end of March would capture this event.Move on to Slide 4. Let's discuss our financial results. Let’s discuss our financial results. We’ve recorded a loss of R$657 million in the first quarter of 2020, compared to an income of R$647 million in the first quarter of 2019. The loss recorded in this first quarter 2020 was mainly due to the R$1.8 billion expense with exchange rate variations from borrowings and financing denominated environment in yen.In terms of the negative impact of exchange rate variation on the debt service and on our cash, it was really small compared to the R$1.8 billion that is R$42 million. Despite the net loss reported in the quarter earnings before taxes and financial results was a positive R$1 billion, but R$138 million lower than in the same period of 2019. This reduction was mainly due to the R$149 million increase in allowance for doubtful accounts.First quarter adjusted EBITDA was R$1.48 billion compared to R$1.54 billion in first quarter of 2019, that is a reduction of 3.9%. Net operating revenue increased R$163 million or 4.2% for the first quarter of 2020 from R$3.88 billion to R$4.04 billion as a result of the R$268 million or 7.6% increase in gross revenue and an R$2.1 million or 13.6% decrease in construction revenues.As for costs administrative and selling expenses and construction costs, there was an increase of 10.9% or R$299 million. If we disregard the effects of construction costs, the increase was 17.6% or R$380 million. The first quarter adjusted EBITDA margin was 36.7% compared to 39.8% in first quarter 2019. The adjusted EBITDA margin up to 12 months was 41.1%. If we exclude the effects of revenue and construction costs, the adjusted EBITDA margins fell to 41.8% in 2020 -- first quarter 2020 compared to the margin of 46.8% in first quarter 2019. In the LTM 12 months, the margin was 48.3%.Moving to costs on the next slide that highlight the main variations. Well again, as we already mentioned on previous slide, costs administrative selling expenses and construction costs increased R$299 million or 10.9% year-over-year first quarter 2020, that is from R$2.75 billion first quarter 2019 to R$3.04 billion in first quarter 2020. Excluding construction costs, cost and administration and selling expenses increased R$380 million or 17.6%. The main increases were in the allowance for doubtful accounts of R$149 million, and general expenses of R$100 million depreciation and amortization of R$72 million and our electricity expenses of R$43 million.Here, its worth noting, that delinquency increased by approximately R$100 million in the first quarter of 2020 compared to December 2019. In addition, expected losses should increase due to economic stability worsen by the COVID-19 crisis. For a further breakdown of these and other changes and costs please refer to our press release.Let's move on to Slide 6. We quickly summarize the main changes that affected the company's net income in the first quarter of 2020 compared to first quarter of 2019. As mentioned net loss totalled R$657 million. Net operating revenues increased R$163 million; costs and expenses, including construction costs increased R$299 million. Other operating income and expenses, including equity income sell R$3.2 million. The financial results vary negatively by, as mentioned before, R$1.8 billion. And finally income tax and social contribution vary positively by R$633 million due to the tax losses recorded in the first quarter of '20 mainly explained by worsening the company's financial results.Let's move to Slide 7. Here we will comment and highlight some of the social measures implemented by SABESP due to the COVID-19 pandemic. Considering that the company implemented countless initiatives, we will highlight only some of them always emphasizing the basic sanitation role played by SABESP at this moment and this specific health crisis.First initiative is the installation of water in field hospitals. Also since March 24, we have been cleaning the external areas have numerous health facilities, such as hospital does exactly to hospital public spaces such as nursing homes, social reception centers, police station, squares streets, and others. Using reuse water with an extra dosage of chlorine. In the metro region of Sao Paulo region alone approximately 2,000 cleaning actions were carried out. This action was also extended to other 290 municipalities in the state where we operate, totaling approximately 9,000 cleaning activities. It's important to know that for these activities we counted on donations of chlorine in sufficient volume to support this action and still carry further out other actions and continued action.Next initiative is the distribution of water tanks in communities where residents did not yet have a local reservoir in their homes. In total, there were 4,500 water tanks to be delivered, we already delivered 3,800. Around 3,000 units we installed were donated by manufacturers and SABESP is the buyer responsible for organizing the distribution.Another one, we began the installation of washbasins and drinking fountains throughout the state in many places, so the population can wash their hands have quality of water to drink in many areas. There are 65 cities in the interior and coastal covered by this program. In the city of San Paulo, 100 washbasins will be installed in the most vulnerable communities, with the SABESP also responsible for executing the hydraulic part and the structure built by -- this will be done by the municipality.More than 60 washbasins have already been installed in the metro region San Paulo and additional 160 in the interior and the coastline. And last the main initiatives we highlighted, SABESP also participates in the volunteer program. So like food and hygiene products, 35 tons of food and 70 tons of these hygiene projects kits have already been collected and distributed to institutions to take care of the needed population.Let's now move to the next slide. On this slide, we will comment on the company's initiatives to guarantee the execution of investments. Also for the refinancing of debt maturing this year, as well as for the reduction of FX exposure. Debt is already widely known, many debt created a program that provides for the suspension that debt services for six months and the corresponding amount being added to the total remaining debt for companies that have contract, financing with them.So that is certainly already in negotiations with the bank to access the preconditions to obtain this benefit. Also with the BNDES, the company's negotiations to expand and increase the anticipation of disbursements of financing in progress and to postpone the deadlines for providing and showing the expenditure were negative.We're also negotiations with the CEF. This is the social bank, the CEF to defer the payment of the debt service for a predetermined period in a program recently authorized by the FGTS Management Council, and similar to the one already deployed by BNDES.Moving on multilateral agencies, as you know is actively working to support sanitation programs that are, by the way restricted to state control companies such as the SABESP. Let's start commenting with the World Bank, we recently signed in $250 million financing agreement. In the context of this contract, we are negotiating the participation -- sorry, the anticipation of resources for further verification, as well as the application of emergency support actions that allow us to advance additional resources for work and expenses not included in the original scope contracted, but related to this one.So we have also the -- IDB the same for the World Bank, in the context of the recently signed $350 million contract, which has already offered to provide support similar to express by the World Bank. Thus for these two contracts above there is provision that allows the exchange of currency to dollar to real as we move on to the disbursement. So, due to this the execution may not necessarily increase for exchange exposure. But in this case, more specifically, we will comment the reduction in FX exposure further in this presentation.I'll add it; it's premature to predict the exact amount of funds from this initiative that will be secured. We can say that, given the magnitude of the amounts involved, should be a significant number to support our CapEx execution and also the company's liquidity.We now are going to comment on the debt management aimed at meeting the company's needs for refinancing service in a year marked by sharp change in market conditions, particularly impacted by the devaluation of the real.We start with the 25th debenture issuance by the company settled on April 27. The volume reached BRL1.45 billion one series, remunerated or paid CDI's rate at plus 3.6% for a period of 18 months, with goodness maturity of principal and interest. Note that this issue was initially scheduled to raise BRL1 billion by the other vertical with the outbreak of the crisis at the end of March, the market significantly restricted access to investors meeting us and other companies to intensify the demand for liquidity in banks. In this context, the company was not only able to conclude the issue within the initial schedule that is in April. But could also increase the total amount raised by BRL450 million in such anticipating being flow of funds foreseen and planned in its funding and refinancing schedule for this year.So in the context of fundraising, the company has already mandated IBRD invest for a loan in of BRL600 million and has already received authorization from the federal government to issue up to BRL1 billion in infrastructure of the bank.Well, in this point, let's make sure that the company is not announcing or issuing an infrastructure debenture. But again, it's now allowed to issue in such a position that is the appropriate time we will structure an issue but before obviously following all the communication and regulation guidelines by CBM.We would also like to highlight that the company has already contracted several public financing for investment which are in disbursement and specifically this year, we had the expectations to disburse R$1.1 billion. In all, if we add what the company has already secured with the resource of 25th the [bank duration] with the disbursement of financing already contracted with public banks that I mentioned before of R$1.1 billion adding the operation mandated with IBRD, we reach a value of R$3.15 billion.If we also consider the authorization or issuance infrastructure debentures, the company decides to issue later this year, the value of these funds rates could exceed for billing. But also let's make sure that the company financing actions did not end with these movements, given the company's robust credit profile, we continue to seek new local and international fundraising opportunity.Let’s now a comment on the initiatives to reduce our foreign exchange exposure. Following guidelines established by SABESP in relation to foreign exchange exposure presented to you in past conferences. On April 27, the company managed to convert $495 million to real from the debt contracted with inter American Development bank, AIDB corresponding to the outstanding balance of the finance contracted to support the real [indiscernible] stage II -- III sorry the [publishing] program.This debt was originally contracted in dollars at LIBOR three month plus 0.39% per year with maturity in December 2035. With the conversion, the debt now is R$2.81 billion at the cost of CDI rate plus 0.06% per year with the semi and annual amortization and maturity unchanged.So this rate is important to note, we have to add a variable margin periodically determined by the bank for as long as that are supported by ordinary capital, which today is set at 80 basis point, which in fact is the same rate added to the dollar denominated debt.Note that is the estimated impact in the first quarter of this year the conversion to reals up with $494 million using the conversion rate for dollar of March 31, we will reach a reduction of 17% on our FX. Or as you can see in the slide from 55% to 38% FX exposure.To conclude, we highlight at the robust 2020 in the amount of $350 million maturity in December 2020. We will be in stay and observing the market in search to access the best strategy, the best timing, the best instrument to carry out its redemption.Well, SABESP on the debt. Let's move on to the next slide. Here we will comment on the impacts of the economic crisis on SABESP and present measures adopted by the company to preserve liquidity and maintain the positive test of results. Initially as we like to note that the economy was already showing signs of fragility and lagging even before COVID-19 pandemic was granted a status of pandemic by WHO. In the sense COVID-19 intertwined with economic crisis and enhances its effect as we move forward in time.The current situation is marked by the deterioration and the confidence and the cadence of the economic agents and the soaring of the degree of uncertainty in the economy. There's a reduction in the economic activity in practically all sectors. And GDP slowdown estimates and goals successive downward reviews, including those made by the government. In this scenario of recession, unemployment and expected slowdown in recovery activity of economic activity, there's a clear sign of a drop in revenues and an increase in delinquency despite nearly 84% of the volume billed by the company is in the residential category.In addition, high volatility of the exchange rate opens the possibility of negative impacts on our financial expenses.On the other hand, it's important to note that the SABESP as a provider of public water supply and sewage service is an essential player in combating the pandemic. In this regard, the company exempted consumers in the residential social and favela and residential favela categories from paying water and sewage bill for a period of 90 days. That is for bills issued as April 1. In contrast, by the way to the adverse effect on the company's cash brought on by economic crisis and the pandemic, there was an increase in revenue from residential customers except obviously from the social and slum favela categories. And the postponement of the payment of 50% of the regulation fee to January 2020. So now that would help. The situation the company promoted actions with the objective of strengthening its liquidity and maintaining the positive trajectory of the results or maybe packed that would be better. Among which the following stands out.First the reduction of BRL360 million in expenses and postponement of BRL300 million of 2020 planned CapEx. Another is the decrease in the number of employees in the context of a voluntary and incentive dismissal program created an ongoing thing since 2018. This year, by the end of the year, it should be 998 employees leaving the company.Another is a replacement in the judicial sphere of judicial deposit by its surety bonds which will reduce pressure on our cash outflows. Basically are those summarizes these measures but before we conclude our presentation, we would like to remind you that on April 1, we issued a notice to the market about our set Resolution 974 regarding the schedule of events for this third ordinary tariff review. And sequence on April 14, we also published another notice to the market on our set Resolution 981, that disclosed the regulatory agenda for 2021 biennium.Following the regulatory schedule on May 14, the agency published public consultation notices 05/2020 and 06/2020. The first report refers to the definition of the methodology to be used in the calculation of the maximum tariff and the tariff structure. Now the second address is the calculation of the weighted average cost of capital. As disclosed by the regulators the block initially proposed is 7.38% below our current allowed block of 8.11%. The company is currently working on the contributions and comments on the published over the published materials. And we -- will which our contributions will be sent to RSET by the end of the public consultation period in July 3.It's also worth noting that on April 17 our SABESP team published two deliberations that will contribute to mitigate financial impacts on the company arising for the crisis caused by the COVID. One resolution 985 the temporarily postponed payments of the Regulation 3 and the other are Resolution 991, which proposes the postponement of the beginning of the four year program of research and technological development for innovation in sanitation and services. So those two should give us some help.So that concludes our remarks. Now we'll turn into our Q&A session.

[Operator Instructions]Our first question is from Lilyanna Yang from HSBC. Go ahead.

Hey, hi. Thank you for that comprehensive presentation. Would you mind please giving us a brief overview or how you see the regulator responding to the crisis together with SABESP? You indicated that they came out with a preliminary walk, which in my personal view seems low as a 7.38%, right? And you have been suffering from higher delinquency. You have a little bit of demand destruction with unknown outcome on the revenue side for now, right? But you do have a way to review that is as early as May 2021. So, my question is, do you see this potential delay in the rate review process happening in May? And it did happen in the prior to weight reviews for SABESP?And if you see any changes recently for the goods for the bad on the regulatory side, on the approach of the regulator towards the rate review and how they deal with the crisis, which is unprecedented? Any color on that front will be super helpful. Thank you.

Lily, it's Rui. Just to start maybe [Indiscernible] give much color on that. If he is on the line I believe so. Well on the first side without seeing from the technical notes, very recent technical notes. The intention, we can seek to this note is to hurry the process of the tariff review and in the event of complications due to delays related to the COVID, the economic crisis and so on. And some indications of simplification of parts of the process in order to come up with the targets to conclude the whole process on May 2021, but this is a preliminary approach.We expected that they will try to make all the efforts in order to conclude it on time. Despite all of the problems that we have been suffering we and they will. So the answer should be to simplify some process rather than to postpone it, at least at this time. I don't know [indiscernible] more comments or need some testing.

Yes. Rui, I am on the call and I think you've summarized it quite well. I don't feel like to add anything on that. Other than we are ready to comply with all schedules already provided with -- or by assess. So we are working towards delivering information as required right now in May then it may should be providing assess with some start-up information and now a little wise we should be providing comments on the methodology as well as on our work. So that’s about it at this point in time.

Okay, great. Thank you. And follow-up question. On your regulatory asset base, there’s a certain amount of assets of investment that had not yet been recognized by the regulator in your asset base. Do you think that in May, 2021 there would be enough time to get to a review maybe of those assets or the idea is to let them stood apart go and decide about it later when you have more time and then just to make sure that the recent investments of the company are truly reflected in there rather than we discussing what invested pre second rate review?

Go ahead, Rui, you want to answer that?

Yes. It's, well, from our side we are doing our best in order to have those process concluded by May 2021. I believe that the hope of SABESP and the expectation of SABESP is the same. I cannot see a sort of interference in one process on the other. We have time; we have problems of course to evaluate on the field some assets, -- example.But in the other hand the discussion on the previous cuts in our asset basis is now apart it's well known problem. I have to go deep on each, we are working hard to meet and present our points of view to assess and I believe that the both sides want to get it solved the sooner possible.

Our next question is from [Indiscernible]. Go ahead.

Hey gentlemen, it's Hasan Raza from Robert Asset Management. How are you? Rui, Mario, good to hear your voice. Well listen, a question for Rui, in the past, Rui had talked about in - you had mentioned in terms of the regulatory developments as per the assess the calendar, there is the process where is going to be some deliberations into improving the targeted threats for certain customer classes. But right now you have some customer classes paying a lot of tariff and some customer classes paying less, even though they could afford to pay more. So there was some kind of a regulatory process to better align the tariff structure with the customers who can pay --their ability to pay. I'm just wondering where is that prospects right now where the best you can better align the tariff structure for the various customer classes? If you have an update on that process, we'd love to hear on please?

Well, Rui again. And as always, and we are in the middle of the process to review our tariff structure. So we are working hard on it several issues in parallel and yes the timeframe is the end of this year to have it concluded. So we are working on it. And so we have three different --two big movements. The ordinary type review right. The second one the review of our tariff structure that's in place, we are working on it. [Indiscernible] and preparing our technical notes. And, third is one important point left behind. That's -- this cost $R6 billion left behind now follow up date. So the three of then are considered to be running in parallel. So, yes, we have lots of work to do it. I don't know. Keep a word -- or comment, where at this point we are on this last issue?

Okay. I can just want to comment on that. I guess it's important to mention that [Indiscernible] that has just been published foresees that we should conclude this work as well as the work on regulatory office by end of this year. So, there should be one or two months actually few months before the final calculation of the tariff review which should occur in May. So, we have a tight schedule but we are working towards the legal requirements or our intelligence to comment on that.We have had a few conversations with the regulator on the tariff set. But there is no conclusion nor any indication. I mean, what could be the outcome of that. So, that is to what should be done but we are obviously working with them on anything that.

Rui, if I may. Can I ask you one more follow up question? As you might be aware in the electronic distribution sector, the government is setting up a fund to help with the account receivable that might be a way to alleviate any cash working capital grants for electric distribution companies. I know -- I obviously not from your perspective, you are very well capitalized company. Your credit metrics are very solid. I was wondering, do you think that kind of a measure that kind of facility might be useful also for the water sector and if it is, any thoughts as to what we've done to have this similar facility set up by the government or by the state for the water sector. So if need be what companies can draw from that kind of facility.

You mean if I'm following you, Hasan, you're asking me if the government -- you mean the federal one, right could provide funds or conditions special conditions for the water sanitation sector in order to deal with the pandemic economic crisis? Is that correct?

Yes. Specifically how the government is helping the electric distribution sector by setting up a facility which can help companies, if customers are really paying their bills. It's like, almost like a facility to help with working capital, things like that for the electric distribution companies. And I was just wondering if such help could be extended to the water industry.

Okay, you're comparing us with the electricity sector, correct?

Yes, in terms of the government effort for COVID-19.

Okay. In the government attitude. Well, as we commented before the electricity sector is something -- it's quite -- the electric sector, the institution now structures quite the verge -- structure of the sanitation, water sanitation sector in the sense that we have that sector one concession power, this other one and hundreds of companies below in generation, distribution and so on, and transmission, in our, in our case in our sector is quite the opposite we have thousand -- 5,700 and something concession power and municipalities in some cases and connection with the states in metro regions. And then we have just one company that is responsible to provide water and get the sewage untreated.So, we don't see that the possibility of the same movement in a sense that the federal government could provide fund as they announced recently to the whole system in order not to say right size or to compensate, compensate there, they needed to right size in the short trend due to the pandemic and the crisis and the delinquency. In our sector it's different, because I cannot see the possibility of say municipalities or states that the very best economic position fiscal position to provide those kinds of funds to compensate the delinquency or readiness dropping of our companies. But in the other side, we have and we mentioned in our call, Mario said it, that the multilateral banks and private banks here, cash economic, BNDES, IADB, the World Bank and the IADB are providing some possibilities to -- in order to we get more liquidity during the crisis.Or more access to some special lines of financing. For say water treatment and material example, very concrete, that should be very important. We don't have the evaluation to now, but that doesn't suffer our negotiations that we have taking with those banks that will help us to cross these bad period not inch to summarize it, not -- I cannot see funds any from the concession of powers, because there are thousands of very bad superposition. But I can see help from the multilaterals specifically and in some cases from the public banks.

That's helpful. And if I can close with one additional question for you, Rui is can you provide an update on the privatization, legislation? Obviously, a lot has changed because of the pandemic COVID in the last two to three months. So where do you think the privatization legislation currently stands? And what do you think that is the timeframe to potentially revise that legislative process?

Hasan, you make as always a very difficult question to be asked. Because not us but nobody knows exactly the interactions of those two very try to connect the crisis, it's difficult to know the extension or evolve. Remember right now, people in Europe are talking about the second wave and third wave of this pandemic. So what we have done is take the measures immediately in order to constrain our budget in order to provide more liquidity to create say a buffer of liquidity to cross the period that we can see. Of course, we cannot see longer than this year is very difficult as everybody it is difficult to forecast like that, but we, quarter by quarter we are adapting our expectations to the reality and take measures in anticipation of the rollout of our debt. We are anticipating the drop on our revenues are the higher delinquency we probably -- we see in front of us. And adapting time by time every quarter to the reality.

Our next question is from Lilyanna Yang. Go ahead. Lilyanna?

Hey, sorry, I was on mute. Quick question, please. If cash economic also giving you some better conditions for payment of the laws or is just mostly BNDES here.

Mario, I believe that you can answer that question because cash economies we are negotiated with them also. Yes.

Yes. Lily, cash is one step back from BNDES. They're both opening the opportunity for companies to waive the debt servicing for six months. Obviously, that the value, the amount will be added to the total debt. So in that sense, we'll be co funded financed for the period. But we are in our case, working with both to make sure that we fit on the conditions precedent. But overall it is yes, very supportive measure for those two for the sanitation sector. So yes there is something out there.

At this time appears to be no further questions. I'll turn the conference back over to SABESP for their final remarks.

Yes, I'm here. Okay. We like to thank everybody to participate in one more conference call of our results and a very special one. Again, in the middle of a huge crisis and giving you all the information we have, that we are dealing with this crisis. And we are open to questions and to numbers in our IR department, please contact Mario Angela, all the team. We are open 24 hours a day to help you understand better our actions. Thank you very well and see you next quarter. Bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.