CASN4

Companhia Catarinense de Águas e Saneamento (CASAN) is a mixed-capital company created on December 31, 1970, by State Law No. 4,547 and established by Decree No. SSP-30.04.71/58 of July 2, 1971. Its share capital is mostly held by the State Government of Santa Catarina, which uses it as the main instrument for implementing the state’s basic sanitation policy. The company operates as a concessionaire of public water supply and sewage services, serves a significant portion of Santa Catarina’s population, and has common and preferred shares traded on B3 under the tickers CASN3 and CASN4, which positions the company in the Brazilian capital market under a governance framework consistent with its nature as a mixed-capital company.

CASAN’s core focus is the provision of basic sanitation services, acting as the implementing arm of the state policy defined by the Santa Catarina government. Its legal responsibilities include implementing the state sanitation policy, preparing economic and financial studies, developing engineering projects, and planning, coordinating, and executing works and operations for water supply and sewage systems. The company is also empowered to set, collect, and adjust tariffs for services provided and, on an ancillary basis, is authorized to operate in solid waste collection and disposal, the abstraction and bottling of different types of water for commercial purposes, and the use of water source hydraulic potential for power generation, although its predominant activity is concentrated in treated water supply and sewage treatment.

CASAN’s operations are structured mainly into two core end-to-end processes: treated water supply and sewage collection and treatment. In water supply, the company abstracts raw water from surface and underground sources, conveys, treats, stores, and distributes drinking water. In 2024, about 288 million cubic meters of water were made available, of which more than 287 million cubic meters were transported to serve approximately 1.3 million autonomous water supply units, resulting in billed volume of 185 million cubic meters and more than 862 thousand active connections. In sewage services, the company is responsible for the collection, conveyance, treatment, and final disposal of treated effluent, operating collector networks, interceptors, outfalls, and wastewater treatment plants. In 2024, the volume of treated sewage was on the order of 52 million cubic meters, with around 404 thousand autonomous units served and 165.7 thousand billed sewage connections.

CASAN’s customer base consists essentially of residential, commercial, and industrial users served by public water and sewage systems in the areas under its responsibility. In 2024, the company provided services directly to a population of more than 3.5 million people, distributed across 194 municipalities, corresponding to about 65% of the municipalities in Santa Catarina and also including the municipality of Barracão, in Paraná. The company also supplies water on a wholesale basis to six municipalities that operate their own systems, serving an additional approximately 380 thousand inhabitants. In its operating structure, CASAN had, at the end of 2024, 2,704 employees, supported by 4 large regional agencies, 6 medium-sized regional agencies, 118 agencies, and 77 operating districts, which support the operation of 285 water supply systems and 42 sewage systems.

Geographically, CASAN’s main market area is Greater Florianópolis, which accounts for approximately 42% of billed water volume. In addition to this region, the company operates in different areas of the state, including the West, North, Itajaí Valley, North Coast, South, and Mountain regions, with varying levels of water and sewage coverage. Urban water supply is more consolidated, while in sewage services the company reported, in 2024, an average urban coverage rate of approximately 31.37% in the regions where it operates, with variations by regional agency. The operation involves an extensive infrastructure network, including about 15.67 thousand kilometers of water mains and approximately 2.22 thousand kilometers of sewer networks and associated structures.

From an economic standpoint, CASAN derives most of its net operating revenue from water supply services, which accounted for 78.3% of 2024 net operating revenue, while the sewage segment represented 21.7% in the same year. This composition indicates the predominance of treated water supply in revenue generation. In 2024, net operating revenue totaled about R$ 1.95 billion and the company reported profit of R$ 243.0 million, without segmented reporting by business line. The absence of customers accounting for more than 10% of net revenue points to a highly diversified billing base across many users, a typical feature of sanitation companies focused on distribution to end consumers.

CASAN operates in a highly regulated environment, shaped by federal, state, and municipal legislation governing basic sanitation in Brazil. Although it does not depend on classic government authorizations to start its activities, its creation resulted from state legislative authorization, and effective operation in the municipalities is subject to the execution of program contracts, concession contracts, cooperation agreements for associated management, shared management agreements, or service agreements. These instruments define rights and obligations among the company, the municipalities, and the State of Santa Catarina, in line with legal frameworks such as the Federal Constitution of 1988, Law 11,107/2005, Law 11,445/2007, and the changes introduced by Law 14,026/2020. In addition to contractual relationships, the company is subject to oversight by regulatory agencies and to compliance with environmental and health regulations, including drinking water quality standards and effluent discharge limits.

CASAN maintains technical and laboratory infrastructure to ensure the quality of the water supplied and compliance with regulatory parameters. The company operates 146 water treatment plants and 191 simplified treatment units and continuously monitors the quality of raw and treated water through ten quality control laboratories distributed across different regions of Santa Catarina, responsible for millions of physical-chemical and microbiological tests per year. Part of this structure already operates under a quality management system in accordance with ABNT NBR ISO/IEC 17025:2017, with units accredited for various types of tests and water matrices. Quality control of the chemicals used in treatment is also centralized, with analyses of each delivered batch and periodic reporting of results to regulatory agencies.

In environmental, social, and governance (ESG) matters, CASAN annually publishes a sustainability report structured according to Global Reporting Initiative (GRI) guidelines, and a social report presented in the annual financial statements. The company prepares a materiality matrix and ESG key performance indicators, with emphasis on strong alignment with the UN Sustainable Development Goal 6, related to clean water and sanitation. The company conducts a greenhouse gas emissions inventory, disclosing it on its investor relations website and in a public inventory database and incorporating part of these results into the sustainability report. Although the report is not yet audited by an independent entity, the company indicates its intention to implement auditing starting with 2025 results, gradually aligning its transparency and governance practices with regulatory requirements and market expectations for companies with shares traded on B3, as is the case for CASAN through tickers CASN3 and CASN4.