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Yes ______ No ___X___

CIA. DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO - SABESP
Rui de Britto Álvares Affonso
Chief Financial Officer and Investor Relations Officer
Mario Azevedo de Arruda Sampaio
Head of Capital Markets and Investor Relations

1. Net revenue grows 5.2%, EBITDA grows 7.3% with a 50.3% EBITDA margin

(*) Earnings before interest and taxes
(**) Earnings before, interest, taxes, depreciation and amortization
(***) On June 2007 a reverse stock split was accomplished. EPS in 1Q07, considering the reverse stock split would be of R$ 1.29/share

In 1Q08, net operating revenue totaled R$ 1.5 billion, a 5.2% increase compared to 1Q07. Costs and expenses stood at R$ 915.9 million, 2.1% higher than in 1Q07. EBITDA moved up 7.3% from R$ 721.4 million in 1Q07 to R$ 774.3 million in 1Q08, as revenues outgrew costs.

Earnings before financial expenses (EBIT) increased by 10.0%, from R$ 567.3 million in 1Q07 to R$ 624.2 million in 1Q08.

2. Gross operating revenue

In 1Q08, gross operating revenue grew R$ 75.4 million, or 4.8%, from R$ 1,583.2 million in 1Q07 to R$ 1,658.6 million in 1Q08. The main reasons for this increase were:

    • The 4.1% tariff adjustment as of September 2007; and
    • The 1.3% increase in billed volume, of which 0.7% in retail and 6.7% in wholesale; however, the latter does not affect revenues in the same proportion.

3. Billed volume

The following tables show billed water and sewage volume per customer category and region in 1Q07 and 1Q08.

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4. Costs, administrative and selling expenses

In 1Q08, costs, administrative and selling expenses grew R$ 18.6 million, or 2.1% . On the other hand, costs and expenses as a percentage of net revenues dropped from 61.3% in 1Q07 to 59.5% in 1Q08.

4.1. Payroll and benefits

In 1Q08 payroll and benefits grew R$ 18.1 million or 6.0%, from R$ 300.9 million to R$ 319.0 million, due to the following factors:

• Wage increase of 3.37%, as of May 2007;
• 2% increase in payroll, as of June 2007, as performance evaluation; and
• R$ 2.6 million increase in provision for pension plan obligations, due to the change in the discount rate used for actuarial calculation from 8% in 2007 to 6.59% in 2008.

The Company expanded its services and increased the connection per employee rate from 689 in 1Q07 to 714 in 1Q08.

4.2. Supplies

In 1Q08 dropped R$ 1.3 million or 4.0%, from R$ 32.1 million in 1Q07 to R$ 30.8 million in 1Q08 mainly due to: residential connections maintenance, which generated a R$ 0.5 million drop, and system maintenance, which generated a R$ 0.7 million drop.

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4.3. Treatment supplies

In 1Q08 expenses with chemical products were R$ 4.5 million or 12.7% higher than in 1Q07, increasing from R$ 35.5 million in 1Q07 to R$ 40.0 million in 1Q08.

The lower volume of water produced, as a result of the progress of the Water Loss Reduction Program, partially offset the increase in the use of chemical products due to the decline in abstract water quality.

4.4. Third-party services

In 1Q08 this item rose R$ 1.7 million or 1.3%, from R$ 126.7 million to R$ 128.4 million. The main reasons for this increase were:

• Hydrometer reading and bill delivery in the amount of R$ 2.4 million, due to the expansion of the TACE (external technical sales services) and the increase in the number of connections;
• R$ 2.2 million increase with surveillance due to the expansion of the area with electronic monitoring;
• Preventive and corrective maintenance at the water and sewage treatment systems in the amount of R$ 2.0 million; and
• These increases were partially offset by the R$ 4.9 million due to the booking of expenses related to the software license agreements.

4.5. Electric power

Electric power dropped R$ 4.7 million or 4.0%, from R$ 118.2 million in 1Q07 to R$ 113.5 million in 1Q08.

This result was due to the 10.0% drop in the tariff from the captive market, which is responsible for 77.0% of total expenses with electric power, and the 1.1% decrease in electric power consumption between 1Q07 and 1Q08.

4.6. General expenses

In 1Q08 general expenses moved up R$ 23.6 million or 52.7%, from R$ 44.8 million to R$ 68.4 million, due to:

• New provisions for lawsuits related to clients and expenses with environmental compensation with a R$ 21.9 million increase; and
• Payment for the use of water in the Piracicaba, Capivari, Jundiaí, Jaguarí, Atibaia and Paraíba do Sul river basins, with a R$ 1.5 million increase.

4.7. Tax expenses

In 1Q08 tax expenses dropped R$ 0.5 million or 5.7%, as a result of the extinction of the CPMF tax with a R$ 6.3 million decrease. This drop was, partially, offset by exemption removal of the Municipal Real Estate Tax (IPTU) in the municipality of São Paulo, in the amount of R$ 5.3 million.

4.8. Credit write-offs

In 1Q08 credit write-offs dropped R$ 18.8 million or 24.6%, from R$ 76.3 million to R$ 57.5 million, mainly due to credit recovery resulting from agreements reached with the municipalities of Barueri, São Vicente, Cajamar and Bragança Paulista.

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5. Financial expenses and revenues

5.1. Financial expenses

In 1Q08 financial expenses grew R$ 5.4 million, or 3.2%, as follows:

The highlights for domestic financing were:

• The R$ 16.1 million drop in the amount paid as interest regarding the settlements of the 2^nd series of the 5^th debenture in March 2007, and of the 1^st series of the 6^th debentures in September 2007.

The highlights for international financing were:

• The R$ 2.8 million decline in interest due to the settlement of agreements with IDB - Inter-American Development Bank (in January, June, July and December 2007) and with the World Bank (in April 2007).

In 1Q08 the Company recorded an increase of R$ 12.2 million in interest regarding lawsuits, moving up from R$ 27.0 million in 1Q07 to R$ 39.2 million in 1Q08.

Other financial expenses increased by R$ 12.1 million mainly due to the payment of interest on own capital, referring to the period between March 2004 and December 2006, in the amount of R$ 7.8 million, as foreseen by the second amendment of the GESP Agreement.

5.2. Financial revenues

Financial revenues increased R$ 12.0 million, moving up from R$ 23.4 million to R$ 35.4 million, mainly due to a higher number of installment agreements with customers in 1Q08 versus 1Q07.

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6. Foreign exchange and indexation

6.1. Variation on liability

The net effect of the foreign exchange and indexation was R$ 40.0 million negative in 1Q08 versus R$ 24.3 million positive in 1Q07, due to:

• The lower appreciation of the Brazilian Real against US dollar in 1Q08 (1.3%), versus 1Q07 (4.1%), despite a 6.0% Brazilian real depreciation against the currency basket in 1Q08 in comparison to 0.43% in 1Q07, generating a net variation of R$ 58.4 million;
  
  
• Drop in the R$ 8.1 million monetary restatement from the agreement with Banco do Brasil, mainly due to the lower variation of the TR, 0.17% in 1Q08 versus 0.48% in the previous period; as well as the decrease in the debit balance due to the settlement of the installments falling due in the period; and
  
  
• R$ 14.0 million increase from other monetary variation, mainly by:
  - Higher variation of the IGPM Index, 2.38% in 1Q08, versus 1.11% in the previous period with a R$ 12.7 million increase in monetary restatement over debentures; and
  - Monetary restatement from lawsuit indemnities with a R$ 1.2 million increase.

6.2. Variation on assets

Foreign Exchange and indexation increased R$ 6.7 million or 65.0%, from R$ 10.3 million in 1Q07 to R$ 17.0 million in 1Q08, mainly due to agreements on debt rescheduling.

7. Non-operating result

Non-operating result grew R$ 12.0 million, from a R$ 1.0 million expense in 1Q07 to a R$ 11.0 million revenue in 1Q08, due to the following:

7.1. Non-operating revenues

Non-operating revenues moved up R$ 14.9 million, from R$ 1.3 million in 1Q07 to R$ 16.2 million in 1Q08, mainly due to the sale of exceeding electric power in the amount of R$ 8.9 million and the time prescription of amounts to be reimbursed to clients totaling R$ 1.3 million.

7.2. Non-operating expenses

Non-operating expenses climbed R$ 1.4 million or 70.0% over the same period of the previous year, due to the write-off of discontinued properties, plants and equipments and obsolete projects.

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8. Operating indicators

The following table shows the continuous expansion of the services rendered by the Company:

9. Loans and financing

Sabesp plans to sign, by the end of May, the following loans and financing, which have already been approved by the Board of the respective Banks: R$ 170 million from BNDES, R$ 619 million from Caixa Econômica Federal and US$ 250 million from the IDB. These operations are part of the process in line with 2008 operating plan.

At the table below we present the debt amortization schedule:

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10. Conference call

Live webcast at www.sabesp.com.br

For more information, please contact:

Mario Arruda Sampaio
Phone. (55 11) 3388-8664
E-mail: maasampaio@sabesp.com.br

Angela Beatriz Airoldi
Phone. (55 11) 3388-8793
E-mail: abairoldi@sabesp.com.br

Statements contained in this press release may contain information that is forward-looking and reflects management's current view and estimates of future economic circumstances, industry conditions, SABESP performance, and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this press release that do not describe historical facts, such as statements regarding the declaration or payment of dividends, the direction of future operations, the implementation of principal operating and financing strategies and capital expenditure plans, the factors or trends affecting financial condition, liquidity or results of operations are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. There is no guarantee that these results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

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Income Statement

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Balance Sheet

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Cash Flow

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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.