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information to the Commission pursuant to Rule 12g3-2(b) under
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Table of Contents

Company Information

Parent Company’s Financial Statements

Statement of Changes in Equity

Reports and Statements

Company Data / Capital Breakdown

Parent Company’s Financial Statements / Statement of Financial Position – Assets

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Parent Company’s Financial Statements / Statement of Financial Position – Liabilities

(R$ thousand)

Parent Company’s Financial Statements / Statement of Financial Position – Liabilities

(R$ thousand)

Parent Company’s Financial Statements / Income Statement

(R$ thousand)

Parent Company’s Financial Statements / Statement of Comprehensive Income

(R$ thousand)

Parent Company’s Financial Statements / Statement of Cash Flow - Indirect Method

(R$ thousand)

Parent Company’s Financial Statements / Statement of Cash Flow - Indirect Method

(R$ thousand)

Parent Company’s Financial Statements / Statement of Changes in Equity / 1/01/2021 to 3/31/2021

(R$ thousand)

Parent Company’s Financial Statements / Statement of Changes in Equity / 1/01/2020 to 3/31/2020

(R$ thousand)

Parent Company’s Financial Statements / Statement of Added Value

(R$ thousand)

In 1Q21, the Company recorded net income of R$ 496.9 million, compared to loss of R$ 657.9 million in 1Q20, an increase of R$ 1,154.85 million, or 175.5%.

Adjusted EBITDA totaled R$ 1,636.4 million, an increase of R$ 152.6 million over the R$ 1,483.8 million reported in 1Q20, or 10.3%.

The main factors were:

In June 2020, the Company entered into an agreement with the municipality of Mauá, starting operations in November. The operation in Santo André led to an increase of R$ 23.1 million in revenue from sanitation services and R$ 9.0 million in expenses, as shown below:

The economic instability, worsened by the beginning of the COVID-19 pandemic, led to a strong appreciation of the U.S. dollar and Yen against the Brazilian real in 1Q20, significantly affecting financial expenses on borrowings and financing in foreign currency. In 1Q21, expenses with exchange variation on borrowings and financing totaled R$ 137.6 million, a decrease of R$ 1,658.9 million from the R$ 1,796.5 million recorded in 1Q20.

In addition, allowances for doubtful accounts fell by R$ 36.4 million year over year in 1Q21, from R$ 157.5 million to R$ 121.1 million.

On April 28, 2020, the Company completed the debt conversion, from US$ 494.6 million to R$ 2,810.9 million, with the Inter-American Development Bank (IDB) with a view to reduce foreign currency exposure.

On September 30, 2020, it carried out the early amortization of Eurobonds maturing in December 2020, in the amount of R$ 1,910.1 million (US$ 350.0 million).

The main result of these actions was the lower dollar-denominated debt, which fell by 84.2%, from US$ 1,027.7 million on March 31, 2020 to US$ 162.5 million on March 31, 2021.

Debt denominated in foreign currency accounted for 21% in March 2021 (55% in March 2020).

R$ million

(*) Number of shares = 683,509,869

Adjusted EBITDA Reconciliation (Non-accounting measures)

R$ million

* Adjusted EBIT corresponds to income before: (i) other operating revenues/expenses, net; (ii) financial result; and (iii) income tax and social contribution.

** Adjusted EBITDA corresponds to income before: (i) other operating revenues (expenses), net; (ii) financial result; (iii) income tax and social contribution; and (iv) depreciation and amortization expenses.

In 1Q21, net operating revenue, which considers construction revenue, totaled R$ 4,677.4 million, up 15.7% over 1Q20.

Costs and expenses, which consider construction costs, totaled R$ 3,591.2 million, up 17.9% over 1Q20.

Adjusted EBIT totaled R$ 1,094.3 million, up 9.4% over the R$ 1,000.3 million recorded in 1Q20.

Adjusted EBITDA, in the amount of R$ 1,636.4 million, increased by 10.3% over the R$ 1,483.8 million reported in 1Q20 (R$ 6,574.3 million in the last 12 months).

The Adjusted EBITDA margin reached 35.0% in 1Q21, compared to 36.7% in 1Q20 (35.7% in the last 12 months).

Excluding the effects of revenue and construction costs, adjusted EBITDA margin reached 44.2% in 1Q21, compared to 41.8% in 1Q20 (45.6% in the last 12 months).

The Company recorded net income of R$ 496.9 million in 1Q21, compared to loss of R$ 657.9 million in 1Q20.

Gross operating revenue from sanitation services, in the amount of R$ 3,937.2 million, which does not consider construction revenue, increased R$ 133.3 million, or 3.5%, when compared to the R$ 3,803.9 million recorded in in 1Q20.

The main factors that led to this increase were:

●     Tariff adjustment of 3.4% since August 2020;

●     Increase of 2.6% in total billed volume, excluding the effects of Mauá; and

Construction revenue increased R$ 501.9 million in 1Q21, or 96.3%, over 1Q20. The increase was mainly due to higher asset investments.

The following tables show the water and sewage billed volumes, on a quarter-over-quarter basis, per customer category and region. Mauá volumes are presented individually.

Costs, administrative and selling expenses and construction costs increased R$ 545.5 million in 1Q21 (17.9%). Excluding construction costs, the increase was R$ 54.0 million (2.1%). Costs, administrative and selling expenses and construction costs as a percentage of net revenue was 76.8% in 1Q21, compared to 75.3% in 1Q20.

R$ million

Salaries and payroll charges and Pension plan obligations

In 1Q21, the R$ 56.4 million, or 8.3%, decrease was due to:

Services

Expenses with services totaled R$ 503.9 million, an increase of R$ 79.8 million, or 18.8%, over the R$ 424.1 million recorded in 1Q20. The main increases were:

●     R$ 32.0 million with paving and replacing of sidewalks;

●     R$ 27.0 million with meter reading and bill delivery; and

●     R$ 13.3 million with network maintenance and connections.

Electricity

Electricity expenses totaled R$ 358.9 million in 1Q21, up R$ 32.4 million, or 9.9%, over the R$ 326.5 million recorded in 1Q20. In 1Q21, the Free Market Tariffs (ACL) accounted for 51.5% of total expenses (44.9% in 1Q20) while the Regulated Market Tariffs (ACR) accounted for 48.5% (55.1% in 1Q20).

The main factors that contributed this variation were:

●     Average increase of 12.2% in ACR tariffs, with a 9.6% drop in consumption.

General expenses

Decrease of R$ 33.5 million, or 11.5%, totaling R$ 258.9 million in 1Q21, compared to the R$ 292.4 million recorded in 1Q20, mainly due to:

●     Lower expenses with lawsuits in 1Q21, in the amount of R$ 20.5 million; and

●     Decrease of R$ 10.5 million in estimated losses with revenue from consulting services.

Depreciation and amortization

Increase of R$ 58.6 million, or 12.1%, due to beginning of operations of intangible assets, in the amount of R$ 4.1 billion.

Allowance for doubtful accounts

Decrease of R$ 36.4 million, from R$ 157.5 million in 1Q20 to R$ 121.1 million in 1Q21, due to higher provisioning arising from the increase in default and the worsening of expected future losses in 2020 with the beginning of the COVID-19 pandemic.

R$ million

Financial expenses, net of income

R$ million

Financial expenses

Decrease of R$ 0.4 million, due to:

Monetary and exchange variation, net

R$ million

Monetary and exchange variation losses

The effect of net monetary and exchange variations in 1Q21 was R$ 1,625.5 million, lower than in 1Q20, highlighting:

●     Decrease of R$ 1,658.9 million in exchange variation on borrowings and financing, due to:

(i) lower appreciation of U.S. dollar and Yen against the Brazilian real in 1Q21 (9.6% and 2.2%, respectively), compared to the 1Q20 appreciation (29.0% and 30.2%, respectively); (ii) debt exchange with IDB, from US$ 494.6 million to R$ 2,810.9 million; and (iii) amortization of Eurobonds in September 2020, in the amount of R$ 1,910.1 million (US$ 350.0 million);

In 1Q21, there was an increase of R$ 573.0 million, due to higher taxable income, highlighting:

●     Decrease in expenses with exchange variation, in the amount of R$ 1,658.9 million; and

This quarter the water loss indicators already include the municipality of Guarulhos. The municipalities of Santo André and Mauá will become part of the indicator in 2022.

⁽¹⁾ Total connections, active and inactive, in thousand units at the end of the period. Excludes Mauá

⁽²⁾ In million inhabitants, at the end of the period. Excludes wholesale supply and Mauá

⁽³⁾ In millions of cubic meters

⁽⁴⁾ In 1Q20, excludes Guarulhos, Santo André, Mauá, Aguaí, Tapiratiba and Tejupá; in 1Q21, excludes Santo André, Mauá, Aguaí, Tapiratiba and Tejupá

^(*) Unaudited

The managerial performance indicators below show revenue from sanitation services, operating expenses and EBITDA, all measured based on billed cubic meter.

The historical series has been presented since 2014, based on quarterly financial data disclosed by the Company, excluding non-recurring and relevant events that would distort the result.

All indicators were calculated based on average values of 1Q21, adjusted by changes in the IPCA consumer price index, to determine the behavior on a same-price base in the period.

Revenue from sanitation services per billed cubic meter increased, especially after the third quarter of 2015. In 1Q21, it was down by 3.9% from 1Q20.

Operating expenses per billed cubic meter increased in a controlled manner on a quarterly basis, compatible with the expansion of operations, showing a stable average performance and reflecting disciplined cost management. In 1Q21, it fell by 5.6% from 1Q20.

Finally, the EBITDA per cubic meter increased in the period, basically due to the performance of gross revenue from sanitation services and operating expenses. The first quarter of 2021 shows a positive evolution of 2.4% compared to 1Q20, reflecting the Company’s efforts in view of the challenges of the economic scenario.

REVENUE FROM SANITATION SERVICES PER BILLED m³ - R$/m³

Figures at 1Q21 average prices, adjusted by IPCA

The following were not considered:

- Construction revenue

- R$928 million referring to the agreement with Guarulhos in 4Q18

- R$1,254 million referring to agreement with Santo André in 3Q19

- R$195 million referring to agreement with Mauá in 2Q20

OPERATING EXPENSES PER BILLED m³ - R$/m³

Figures at 1Q21 average prices, adjusted by IPCA

Expenses considered: personnel, general supplies, treatement materials, services, electricity, general expenses and tax

Reversals excluded:

- R$696 million referring to agreement with the São Paulo State Government in 1Q15

- R$307 million referring to the migration of the supplementary pension plan in 3Q16

- R$173 million referring to the TAC - Retirees in 3Q19

EBITDA PER BILLED m³ - R$/m³

Figures at 1Q21 average prices, adjusted by IPCA

The following were not considered:

Revenue:

- R$928 million referring to the agreement with Guarulhos in 4Q18

- R$1,254 million referring to agreement with Santo André in 3Q19

- R$195 million referring to agreement with Mauá in 2Q20

Reversal of expenses:

- R$696 million referring to agreement with the São Paulo State Government in 1Q15

- R$307 million referring to the migration of the supplementary pension plan in 3Q16

- R$173 million referring to the end of the TAC - Retirees in 3Q19

Economic

⁽¹⁾ Accrued in the quarter (%)

⁽²⁾ Quarterly rate on the last day

⁽³⁾ Ptax sale rate on the last day

^(*) Unaudited

Covenants

The table below shows the most restrictive clauses in 1Q21:

(1) “Other Onerous Debts” correspond to the sum of pension obligations and healthcare plan, installment payment of tax debts and installment payment of debts with the electricity supplier.

As of March 31, 2021, the Company had met the requirements set forth by its borrowings and financing agreements.

Investments totaled R$ 1,168.4 million in 1Q21.

Cash disbursed in 2020 regarding the Company’s historical investments totaled R$ 659.3 million. The chart below shows investments broken down by water, sewage, and region:

R$ million

1       Operations

Companhia de Saneamento Básico do Estado de São Paulo ("SABESP" or the "Company") is a mixed-capital company headquartered in the municipality São Paulo, at Rua Costa Carvalho, 300, CEP 05429-900, controlled by the São Paulo State. The Company is engaged in the provision of basic and environmental sanitation services in the São Paulo State, as well as it supplies treated water and sewage services on a wholesale basis.

In addition to providing basic sanitation services in the São Paulo State, SABESP may perform activities in other states and countries, and can operate in drainage, urban cleaning, solid waste handling and energy markets. SABESP aims to be a world reference in the provision of sanitation services, in a sustainable, competitive and innovative manner, with a focus on customers.

As of March 31, 2021, the Company operated water and sewage services in 375 municipalities of the São Paulo State, 342 have already signed contracts, pursuant to Law 11,445/2007. Most of these municipalities’ operations are based on 30-year concession, program and service contracts, except for the municipalities of Guarulhos, Mauá, Mogi das Cruzes, Santo André, São Bernardo do Campo, São João da Boa Vista and Tejupá, which have a 40-year term.

The table below shows a summary of the contractual situation of the municipalities served:

The Company operates in the municipality of Juquitiba under authorization by public deeds, which are valid and governed by the Brazilian Civil Code, presented in the chart above as “Municipalities with expired contracts”. Revenue from sanitation services (excluding construction revenue) of this municipality totaled R$ 1,600 in the three-month period ended March 31, 2021 (R$ 1,561 in the three-month period ended March 31, 2020) and the total amount of intangible and contract assets for this municipality was R$ 83,736 as of March 31, 2021 (R$ 77,014 as of December 31, 2020).

The Company's shares have been listed in the Novo Mercado segment of B3 under ticker SBSP3 since April 2002 and on the New York Stock Exchange (NYSE) as American Depositary Receipts (“ADRs”) Level III, under ticker SBS, since May 2002.

Since 2008, the Company has been setting up partnerships with other companies, which resulted in the following companies: Sesamm, Águas de Andradina, Aquapolo Ambiental, Águas de Castilho, Attend Ambiental and Paulista Geradora de Energia. Although SABESP has no majority interest in the capital stock of these companies, the shareholders’ agreements provide for the power of veto and casting vote in certain issues jointly with associates, indicating the shared control in the management of investees.

Economic instability worsened by COVID-19

The global economic instability worsened with the outbreak of a new coronavirus in early 2020, which was considered pandemic by the World Health Organization (WHO). Accordingly, SABESP has been taking several measures to ensure the continuity and quality of the services provided to the population, which have become even more essential. It is worth noting that any interruption in water supply by a basic sanitation company may compromise compliance with WHO’s recommendations for everyone to keep good hygiene habits, such as washing hands correctly and more frequently.

The Company implemented a number of preventive measures so that its employees are not exposed to situations of risks, such as: (i) employees from the administrative sectors (especially) and those with more than 60 years of age are working under a remote system; (ii) restriction of domestic and international trips; (iii) anticipation of the influenza and pneumonia vaccination campaign; (iv) closing of all branches that assist the public, concentrating services in the digital channels in order to protect customers and employees; among others.

Some of the economic and financial consequences arising from the COVID-19 pandemic include the following adverse effects in the first quarter of 2021:

Opposed to the adverse effects, there were positive effects with the increase in revenues from residential customers, in an estimated amount of R$ 136.6 million from January to March 2021.

Because of the adverse effects, in order to preserve the economic and financial sustainability, the Company adjusted budget by reducing expenses and, on April 27, 2020, July 10 and December 15, 2020, held the 25th, 26th and 27th issue debentures in the amounts of R$ 1.45 billion, R$ 1.05 billion and R$ 1.00 billion, respectively. Also on December 7, 2020, it raised R$ 0.95 billion with IDB INVEST. As of April 28, 2020, the Company concluded the translation of a debt contracted with the Inter-American Development Bank (IDB), from US$ 494.6 million to R$ 2,810.9 million, reducing its exposure to the variation of the US dollar. In addition, as of September 30, 2020, the Company early amortized

Eurobonds in the amount of R$ 1,910.1 million (US$ 357.8 million) to further reduce its currency exposure.

Management expects that the initiatives taken in view of the impacts mentioned, in addition to improved water security, due to the works carried out, will be sufficient to meet its commitments and not compromise the Company’s operating and financial continuity.

New Legal Sanitation Framework

On July 15, 2020, the Brazilian President sanctioned Federal Law 14,026/2020, known as New Legal Framework for Basic Sanitation. The new law expands competition in the sector, by extinguishing program contracts.

Additionally, the New Legal Framework imposes performance goals to reach 99% of the population served with drinking water and 90% with sewage collection and treatment by December 31, 2033, encouraging operators to increase efficiency. It also granted the National Water Agency (ANA) with authority to edit reference rules to regulate sanitation with a view to minimize regulatory uncertainties, thus creating a more stable and attractive environment for investments in the sector.

In this new context, the Company understands it has some competitive advantages: i) it has contracts that already include goals that meet or even anticipate those defined by the New Legal Framework; ii) it has access to public capital and major exposure to the private capital market, favoring the maintenance and/or expansion of the operated base; iii) it has high governance level; and iv) it has contracts signed with the granting authority that ensure 95% of revenue.

Approvals

The interim financial information was approved by the Board of Directors on May 13, 2021.

Presentation of the Interim Financial Information

The interim financial information as of March 31, 2021, was prepared based on the provisions of CPC 21 (R1) – Interim Financial Information and the international standard IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), applicable to the preparation of Quarterly Information Form – ITR and they are fairly presented consistent with the rules issued by the Brazilian Securities and Exchange Commission (CVM). Accordingly, this interim information takes into consideration the Official Letter CVM/SNC/SEP 003 of April 28, 2011, which allows the entities to present selected notes to the financial statements, in cases of redundant information already disclosed in the Annual Financial Statements. The interim financial information for March 31, 2021, therefore, does not include all the notes and reporting required by the annual financial statements, and accordingly, shall be read jointly with the Annual Financial Statements as of December 31, 2020, prepared pursuant to the International Financial Reporting Standards – IFRS, issued by the International Accounting Standards Board – IASB and pursuant to the accounting practices adopted in Brazil, which observe the pronouncements issued by the Brazilian Accounting Pronouncements Committee - CPC. Therefore, in this interim financial information, the notes below were either not presented or are not as detailed as those in the annual financial statements (according to numerical references):

All material information related to the interim financial information, and this information alone, is being disclosed and corresponds to the information used by the Company’s Management in its administration.

The amounts disclosed in the Notes are in thousands of reais, unless otherwise stated.

The accounting policies used in the preparation of the interim financial information for March 31, 2021 are consistent with those used to prepare the Annual Financial Statements for the year ended December 31, 2020, disclosed on Note 3 of such financial statements.

The Company's activities are affected by the Brazilian economic scenario, making it exposed to market risk (exchange rate and interest rate), credit risk and liquidity risk. The financial risk management is focused on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance.

The Company has not utilized derivative instruments in any of the reported periods.

Currency exposure implies market risks associated with currency fluctuations, since the Company has foreign currency-denominated liabilities, arising from long-term funding, in development institutions, at lower interest rates, in US dollar and yen.

The management of currency exposure considers several current and projected economic factors, besides market conditions.

This risk arises from the possibility that the Company may incur in losses due to exchange rate fluctuations that would impact liability balances of foreign currency-denominated borrowings and financing and related financial expenses. The Company does not maintain hedge or swap contracts or any derivative financial instrument to hedge against this risk.

Part of the financial debt is indexed to the US dollar and Yen, in the total amount of R$ 3,569,168 as of March 31, 2021 (R$ 3,563,170 as of December 31, 2020). The exposure to exchange risk is as follows:

The 0.1% increase in the balance of the foreign-currency denominated debt from December 31, 2020 to March 31, 2021 was mainly impacted by the appreciation of the U.S. dollar and Yen against the Brazilian real, as follows:

This increase was partially offset by the amortization of installment payments of foreign currency denominated debt contractually provided for.

From January to March 2021, the Company recorded expenses of R$ 137,573 (R$ 1,796,539 from January to March 2020) from the currency variation of the borrowings and financing agreements. See Note 28. As of March 31, 2021, if the Brazilian real had depreciated or appreciated by 10 percentage points, in addition to the impacts already mentioned above, against the US dollar and Yen with all other variables held constant, the effects on results before taxes on the three-month period ended March 31, 2021 would have been R$ 356,917 (R$ 805,550 for the three-month period ended March 31, 2020), lower or higher, mainly as a result of exchange losses or gains on the translation of foreign currency-denominated borrowings and financing.

Scenario I below presents the effect in income statements for the next 12 months, considering the projected rates of the US dollar and the Yen. Considering the other variables as remaining constant, the impacts for the next 12 months are shown in scenarios II and III with possible depreciations of 25% and 50%, respectively, in the Brazilian real.

The Company understands that scenarios 25% and 50% are reasonable, given the instability of the real against the U.S. dollar and the Yen. Depreciation came to 9.6% and 2.2%, respectively, in 2021.

Interest rate risk

This risk arises from the possibility that the Company could incur losses due to fluctuations in interest rates, increasing the financial expenses related to borrowings and financing.

The Company has not entered into any derivative contract to hedge against this risk; however it continually monitors market interest rates, in order to evaluate the possible need to replace its debt.

The table below provides the borrowings and financing subject to variable interest rate:

Another risk to which the Company is exposed is the mismatch of inflation adjustment indices of its debts with those of its service revenues. Tariff adjustments of services provided do not necessarily follow the increases in the inflation indexes to adjust borrowings, financing and interest rates affecting indebtedness.

On March 31, 2021, if interest rates on borrowings and financing had been 1 percentage point higher or lower with all other variables held constant, the effects on profit before taxes for the three-month period ended March 31, 2021 would have been R$ 139,415 (R$ 95,286 for the three-month period ended March 31, 2020), lower or higher, mainly as a result of lower or higher interest expense on floating rate borrowings and financing.

Credit risk is related to cash and cash equivalents, financial investments, as well as credit exposures to wholesale basis and retail customers, including accounts receivable, restricted cash and accounts receivable from related parties. Credit risk exposure to customers is mitigated by sales to a dispersed base.

The maximum exposure to credit risk as of March 31, 2021 is the carrying amount of instruments classified cash and cash equivalents, financial investments, restricted cash, trade receivables and accounts receivable from related parties in the reporting date. See additional information in Notes 6, 7, 8, 9 and 10.

Regarding the financial assets held with financial institutions, the credit quality was assessed by reference to external credit ratings (if available) or to historical information about the bank’s default rates. For the credit quality of the banks,

such as deposits and financial investments, the Company assesses the rating published by three main international agencies (Fitch, Moody's and S&P), as follows:

The rating assessment disclosed by Fitch for deposit transactions and financial investments in local currency (R$ - domestic rating) is as follows:

(*) As of March 31, 2021, R$ 254,075 (R$ 253,066 as of December 31, 2020), referring to Banco BV, checking accounts and financial investments, which are not rated by Fitch, are included in this category. The investment in Banco BV is due to the fundraising structure defined for the 25th issue debentures, with settlement on April 27, 2020, which required the need to maintain the funds raised from each institution invested for at least 60 days, provided that the yield was higher than SABESP's opportunity cost at that moment.

Liquidity is primarily reliant upon cash provided by operating activities and borrowings and financing obtained in the local and international capital markets, as well as the payment of debts. The management of this risk considers the assessment of its liquidity requirements to ensure it has sufficient cash to meet its operating and capital expenditures needs.

The funds held are invested in interest-bearing current accounts, time deposits and securities, selecting instruments with appropriate maturity or liquidity sufficient to provide margin as determined by projections mentioned above.

The table below shows the financial liabilities, per relevant maturities, including the installments of principal and future interest to be paid according to the agreement. For agreements with floating interest rate, the interest rates used correspond to the base date of March 31, 2021.

Cross default

The Company has borrowings and financing agreements including cross default clauses, i.e., the early maturity of any debt may imply the early maturity of these agreements. The indicators are continuously monitored in order to avoid the execution of these clauses, and the most restrictive are shown in Note 16 (c).

The table below shows the sensitivity analysis of the financial instruments, prepared in accordance with CPC 40, In order to evidence the balances of main financial assets and liabilities, calculated at a rate projected for the twelve-month period after March 31, 2021, or until the final settlement of each contract, whichever is shorter, considering a probable scenario (Scenario I), appreciation of 25% (Scenario II) and 50% (Scenario III).

The purpose of the sensitivity analysis is to measure the impact of changes in the market over the financial instruments, considering constant all other variables. In the time of settlement the amounts can be different from those presented, due to the estimates used in the measurement.

(*)       Source: CDI and IPCA (BACEN Focus Report, March 31, 2021) and long-term interest rate as of March 31, 2021 (BACEN).

(**) Source: B3.

(***) Source: B3.

(i)     Refers to the scenario of interest to be incurred for the 12 months as of March 31, 2021 or until the maturity of the agreements, whichever is shorter.

The objectives when managing capital are ensuring its ability to increase investments in infrastructure, providing returns for shareholders and benefits for other stakeholders, and maintaining an optimal capital structure to reduce the cost of capital.

Capital is monitored based on the leverage ratio, which corresponds to net debt divided by total capital (shareholders and creditor’s equity). Net debt corresponds to total borrowings and financing less cash and cash equivalents and financial investments. Total capital is calculated as total equity plus net debt, as shown in the statement of financial position.

As of March 31, 2021, the leverage rate remained at 37% compared to December 31, 2020.