Copasa filed its third-quarter financial statements with Brazil's securities regulator, the CVM, on Monday, November 9. Operations performed well, posting an adjusted EBITDA of R$ 828 million—a 14.0% increase—yet adjusted net income dropped 6.0% to R$ 339,2 million as higher interest and tax expenses absorbed the difference. For unitholders, the chief concern is that debt is growing faster than earnings, while interest on capital (JCP) per share continues to decline.
CSMG3: What Happened? Did the Stock Disappear or Get Delisted?
No. CSMG3 shares remain listed and actively traded on the B3. According to Status Invest, the stock opened the year trading around R$ 42.93 and currently sits at R$ 50.54. The company has not published any documents regarding a going-private transaction, ticker change, or trading suspension. This year's privatization shifted control and management, but the company remains publicly traded. If you cannot find the ticker in your brokerage app, the issue lies with the search function, not the stock. Verify that you entered the correct ticker; in the fractional market, it ends with an F (CSMG3F).
The main event is the release of Q3 2026 earnings, published after the market close. The report arrives during an already difficult week for the stock, which dropped about 12.8% in October and faced downward pressure from BlackRock reducing its stake in Copasa. The financial statements help explain this market skepticism.
What Did the Q3 2026 Earnings Show, Number by Number?
Net revenue reached R$ 2.0 billion, a 9.8% increase. This growth stemmed from an average tariff adjustment of 6.56%, in effect since January 22, 2026, combined with growth in measured water and sewage volume that the company had already previewed in its operational release, as detailed in our analysis of the quarter's volumes. The bigger story lies further down the income statement:
| Metric | Q3 2025 | Q3 2026 | Reading |
|---|---|---|---|
| Adjusted EBITDA | ~R$ 726 million* | R$ 828 million | Stronger operations |
| Adjusted EBITDA margin | 39.3% | 40.8% | +150 bps |
| Net financial expense | R$ 31.9 million | R$ 104.7 million | More than tripled |
| Adjusted net income | ~R$ 361 million* | R$ 339.2 million | -6.0% |
| Net debt | R$ 6.06 billion | R$ 8.45 billion | +R$ 2.39 billion in 12 months |
| Net debt / EBITDA | 2.1x | 2.8x | Rising leverage |
| Distribution losses | 37.3% | 34.9% | Less wasted water |
| JCP per share (declared in quarter) | R$ 0.4476 | R$ 0.2556 | -43% |
* Our estimate based on the variation reported by the company (R$ 828 million ÷ 1.14; R$ 339.2 million ÷ 0.94). JCP values are sourced from B3 historical dividend records.
Net financial expenses surged from R$ 31.9 million to R$ 104.7 million, a difference of roughly R$ 73 million in a single quarter. That increase is more than enough to erase the operational gain. But where is this debt coming from?
Why Did Net Income Fall If Operations Improved?
The capital expenditure program provides the explanation. During the first nine months of the year, the company invested R$ 2.33 billion—16.1% more than a year prior—and funded a large portion of it through debt. Gross debt climbed to R$ 9.37 billion in September, with net debt reaching R$ 8.45 billion, up from R$ 6.06 billion a year earlier. The company also cited an increase in taxes on income, though the earnings release summary did not disclose the exact impact of this effect.
Investing in sanitation is not inherently a problem: new infrastructure generates future revenue, and falling water losses show that part of the capital is already paying off. The issue is timing. Investment returns take years to materialize, while interest expenses begin weighing on results the very next quarter. Debt increased further after the close of the quarter: the 23rd debenture issuance, totaling R$ 1.2 billion, was concluded on October 5 at the DI rate plus 0.34% per year, with a two-year maturity. The spread above the DI rate is low, signaling that the credit market trusts the company. On the other hand, the debt remains tied to the CDI rate. As long as the Selic, Brazil's benchmark interest rate, remains high, every borrowed real carries a heavy cost. That brings us to the question on investors' minds.
Will CSMG3 Interest on Capital (JCP) Keep Falling?
It is already falling. JCP payments for 2026 total R$ 0.4684 for Q1, R$ 0.3759 for Q2, and R$ 0.2556 for Q3. The Q3 2026 payout totals R$ 96.9 million and was paid today, November 9. Over the first nine months of the year, the company has declared R$ 417.0 million in JCP.
The company's published policy targets distributing 50% of its adjusted net income for 2026. The Q3 2026 JCP equals roughly 29% of the quarter's adjusted net income (R$ 96.9 million ÷ R$ 339.2 million, per our calculation). Consequently, a supplemental payment could still occur at year-end, much like in December 2025 when the company paid R$ 0.37 per share in dividends. This remains a possibility rather than a promise, as the filing announces no such supplemental payment. With falling net income and cash requirements for investments, distributions will likely trend lower than those of 2025. Currently, the 12-month dividend yield sits near 4%, a modest return for investors buying the stock primarily for income.
Is It Still Worth Holding CSMG3 After These Results?
The earnings report does not alter our assessment; rather, it explains part of it. On our CSMG3 quotes and fundamentals page, our calculation from October 9 pointed to a fair value range of R$ 23.53 to R$ 40.30 and a recommendation to avoid the stock. The share price has pulled back from R$ 64.45 to roughly R$ 50.5 since then, but it remains above the upper limit of that range. For comparison, Sabesp reported a Q3 2026 with a similar profile: higher EBITDA and lower net income. This is a common challenge for companies undertaking heavy investments in a high-interest-rate environment, not Copasa alone.
- More efficient operations: adjusted EBITDA margin of 40.8% and distribution losses below 35%.
- Tariff adjustments already incorporated alongside low-cost corporate credit (DI + 0.34%).
- Increased energy purchases in the free market: 64% of consumption, up from 54% in December 2025, which should help lower costs.
- Leverage climbed from 2.1x to 2.8x within a year, and accelerated capital expenditures continue to require debt financing.
- JCP per share decreased across every quarter of 2026.
- Corporate governance remains in transition following privatization and executive leadership changes.
The change in control continues to weigh on the assessment: see the new board and executive team appointed following privatization. The next opportunity to address lingering questions is the earnings conference call scheduled for Tuesday, November 10, at 11:00 AM. The primary focus will be whether management intends to set a leverage ceiling and whether they will confirm the 50% payout target for the year.
Verdict: CSMG3 has not disappeared. Instead, the company delivered a quarter marked by stronger operational performance and heavier debt burdens, with net income—and by extension, JCP—absorbing that cost. If you already hold the stock, there is no reason to panic, as the underlying operations remain solid. For new purchases, however, the price still sits above the range we consider fair. Signs of a turnaround would include leverage stopping its upward climb and financial expenses stabilizing.
