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Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

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	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 Market and Investor Relations  Ph: (5511) 3388-8664 / Fax: (5511) 3388-8669  e-mail: maasampaio@sabesp.com.br

SABESP announces its 2Q06 results São Paulo, August 14, 2006 - SABESP - Cia. de Saneamento Básico do Estado de São Paulo - (Bovespa: SBSP3; NYSE: SBS), one of the largest water and sewage service provider in the world based on the number of customers, announces today its results for the second quarter 2006 (2Q06) The Company’s operating and financial information, except when indicated otherwise, is shown in Brazilian Reais, in accordance with the Brazilian Corporate Law. All comparisons in this release, unless otherwise stated, refer to the second quarter of 2005. Highlights Gross operating revenue grows 11.5% in 1H06 EBITDA margin reached 48.4% in 1H06 Net income totaled R$ 503.5 million in 1H06

SBSP3:R$ 229.50/ thousand shares SBS US$ 26.56 (ADR=250 shares) Total shares: 28,480 million Market Value: R$ 6.5 million Closing Price:08/14/2006

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Second Quarter 2006 Results
August 14, 2006
Page 2 of 11

1. 6.9% gross operating revenue growth in 2Q06 and 11.5% growth in 1H06

HALF YEAR		1H05		1H06		Chg.		%
(+)Gross Operating Revenue		2,582.2		2,878.8		296.6		11.5
(-) COFINS and PASEP		192.2		220.8		28.6		14.9
(+)Net Operating Revenue		2,390.0		2,658.0		268.0		11.2
(-) Costs and Expenses		1,565.6		1,669.3		103.7		6.6
(=)Earnings before financial expenses (EBIT*)		824.4		988.7		164.3		19.9
(+)Depreciation and amortization		295.0		297.8		2.8		0.9
(=)EBITDA**		1,119.4		1,286.5		167.1		14.9
EBITDA Margin (%)		46.8		48.4
Net Income		487.1		503.5		16.4		3.4
Earnings per 1,000 shares in R$		17.10		17.68

(*) Earnings before interest and taxes
(**)Earnings before interest, taxes, depreciation and amortization

In the first half 2006, Sabesp’s gross operating revenue totaled R$ 2,878.8 million, an 11.5% increase in comparison to the same period of the previous year. EBITDA reached R$ 1,286.5 million with a 48.4% EBITDA margin. Net income reached R$ 503.5 million.

QUARTER		2Q05		2Q06		Chg.		%
(+)Gross Operating Revenue		1,330.2		1,422.0		91.8		6.9
(-) COFINS and PASEP		98.9		108.6		9.7		9.8
(+)Net Operating Revenue		1,231.3		1,313.4		82.1		6.7
(-) Costs and Expenses		820.6		873.3		52.7		6.4
(=)Earnings before financial expenses (EBIT*)		410.7		440.1		29.4		7.2
(+)Depreciation and amortization		149.5		151.1		1.6		1.1
(=)EBITDA**		560.2		591.2		31.0		5.5
EBITDA Margin (%)		45.5		45.0
Net Income		335.7		175.6		(160.1)		(47.7)
Earnings per 1,000 shares in R$		11.79		6.16

(*) Earnings before interest and taxes
(**)Earnings before interest, taxes, depreciation and amortization

In 2Q06 Sabesp’s gross operating revenue totaled R$ 1,422.0 million and the EBITDA totaled R$ 591.2 million in 2Q06. The 6.9% increase in gross operating revenue was mostly due to the following factors:

• 2.4% increase in billed water and sewage volume; and

• Tariff readjustment of 9.0% as of August 2005, partially offset by a concentration of customers whose consumption was billed at intermediary tariff brackets. This drop in the average tariff was a result of the 2% drop in the consumption calculation period combined with lower temperatures in the period.

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Second Quarter 2006 Results
August 14, 2006
Page 3 of 11

2. Billed volume

The following tables show billed water and sewage volume per customer category and region in 2Q05 and 2Q06.

WATER AND SEWAGE BILLED VOLUME ** PER CUSTOMER CATEGORY – million m3
		Water				Chg		Sewage				Chg		Water + Sewage				Chg
		2Q05		2Q06		%		2Q05		2Q06		%		2Q05		2Q06		%
Residential		315.7		323.7		2.5		247.4		255.2		3.2		563.1		578.9		2.8
Commercial		36.5		36.7		0.5		33.2		33.7		1.5		69.7		70.4		1.0
Industrial		8.2		8.6		4.9		8.0		8.2		2.5		16.2		16.8		3.7
Public		12.0		12.2		1.7		9.6		9.7		1.0		21.6		21.9		1.4
Total Retail		372.4		381.2		2.4		298.2		306.8		2.9		670.6		688.0		2.6
Wholesale		64.6		65.2		0.9								64.6		65.2		0.9
Total		437.0		446.4		2.2		298.2		306.8		2.9		735.2		753.2		2.4

WATER AND SEWAGE BILLED VOLUME **PER REGION – million m3
		Water				Chg		Sewage				Chg		Water + Sewage				Chg
		2Q05		2Q06		%		2Q05		2Q06		%		2Q05		2Q06		%
Metropolitan		248.0		255.8		3.1		202.4		209.4		3.5		450.4		465.2		3.3
Regional Systems*		124.4		125.4		0.8		95.8		97.4		1.7		220.2		222.8		1.2
Total Retail		372.4		381.2		2.4		298.2		306.8		2.9		670.6		688.0		2.6
Wholesale		64.6		65.2		0.9								64.6		65.2		0.9
Total		437.0		446.4		2.2		298.2		306.8		2.9		735.2		753.2		2.4

* Non-metropolitan and coastal regions
** Figures not reviewed by the independent auditors

3. Costs, administrative and selling expenses

Between January and June 2006, product and service costs, administrative and selling expenses recorded a R$ 103.7 million, or 6.6% increase, when compared to the same period of 2005.

Costs and Expenses		1H05		1H06		Change		%
Salaries and payroll		532.0		621.1		89.1		16.7
Supplies		52.4		58.5		6.1		11.6
Treatment supplies		57.1		59.2		2.1		3.7
Third-party services		218.6		213.2		(5.4)		(2.5)
Electric power		207.1		214.9		7.8		3.8
General expenses		83.6		63.4		(20.2)		(24.2)
Depreciation and amortization		295.0		297.8		2.8		0.9
Credit write-offs		106.3		124.2		17.9		16.8
Tax expenses		13.5		17.0		3.5		25.9
Costs, administrative and selling expenses		1,565.6		1,669.3		103.7		6.6

In 2Q06, product and service costs, administrative and selling expenses, increased by R$ 52.7 million or 6.4% . The main variation in 2Q06 were:

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Second Quarter 2006 Results
August 14, 2006
Page 4 of 11

Costs and Expenses		2Q05		2Q06		Change		%
Salaries and payroll		278.0		343.3		65.3		23.5
Supplies		28.2		30.3		2.1		7.4
Treatment supplies		26.1		26.7		0.6		2.3
Third-party services		116.9		105.9		(11.0)		(9.4)
Electric power		109.1		109.5		0.4		0.4
General expenses		45.4		41.5		(3.9)		(8.6)
Depreciation and amortization		149.5		151.1		1.6		1.1
Credit write-offs		60.4		55.9		(4.5)		(7.5)
Tax expenses		7.0		9.1		2.1		30.0
Costs, administrative and selling expenses		820.6		873.3		52.7		6.4

3.1. Salaries and payroll

In 2Q06 the Company expanded its productivity per employee by 3.8% . The number of connections per employee grew from 640 in 2Q05 to 664 in 2Q06 and the number of employees dropped from 17,577 to 17,289, respectively.

Salaries and payroll expenses moved up by R$ 65.3 million or 23.5%, due to the following factors:

• 4.63% readjustment, equivalent to approximately R$ 25.4 million, as of May 2006, affecting wages, social taxes, benefits and provisions;

• Full provision for a bonus payment per performance evaluation to employees in the amount of R$ 40.8 million in 2Q06, non-recurring.

3.2. Supplies

In 2Q06, the figure moved up R$ 2.1 million or 7.4%, primarily due to the following factors:

• Vehicle fuel and lubricants in the amount of R$ 0.9 million or 16.1% mainly due to price readjustment as shown in the table below.

						Fuel
		Alcohol		Gas		Diesel		Natural Gas		Total
Average readjustment (%)		35,3		12,7		10,6		5,2
SABESP’s average consumption (%)		17		43		38		2
Average impact in expenses (%)		6.00		5.46		4.03		0.10		15.59

• Network maintenance up by R$ 0.7 million;
• Vehicle maintenance up by R$ 0.3 million.

3.3. Treatment supplies

Recorded a R$ 0.6 million or 2.3% increase. This result was mostly due to the increase in average treatment supply price, offset by the drop in consumption, primarily chlorine.

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Second Quarter 2006 Results
August 14, 2006
Page 5 of 11

3.4. Third-party services

In 2Q06, this figure recorded a R$ 11.0 million or 9.4% drop in comparison to 2Q05, from R$ 116.9 million to R$ 105.9 million, mostly due to:

• Technical services in the amount of R$ 9.4 million, highlighting costs related to the restructuring of capital market’s operations, in June 2005, in the amount of R$ 7.7 million, non-recurring;
• R$ 2.5 million decrease in specific software expenses, regarding the implementation of the SIGNOS (geographical information system) system in April 2005, non-recurring;
• R$ 1.9 million decrease in residential connection maintenance and R$ 1.8 million decrease in pavement replacing at the São Paulo Metropolitan Region, mostly due to the discontinuance of some contracts regarding the Global Sourcing.

These decreases were partially offset by the following increases:

• R$ 1.7 million regarding security, due to new hiring and existing contracts price readjustments;
• R$ 1.2 million with Telecom services;
• R$ 0.9 million with system maintenance in the São Paulo Metropolitan Region and;
• R$ 0.6 million, mainly due to the hiring of engineering services regarding the detection of leakage.

3.5. Electric power

In 2Q06 recorded a R$ 0.4 million or 0.4% growth versus 2Q05, from R$ 109.1 million to R$ 109.5 million, in spite of the average readjustment and increase in produced volume.

3.6. General expenses

In 2Q06, general expenses recorded a R$ 3.9 million or 8.6% drop in comparison to 2Q05, from R$ 45.4 million to R$ 41.5 million, mainly as a result, of lower provisions for legal contingencies.

3.7. Credit Write-offs

Showed a R$ 4.5 million or 7.5% decrease, primarily due to the improved performance of loss recovery, through the reception of provisioned debits as not chargeable.

3.8. Tax expenses

In 2Q06, tax expenses recorded a R$ 2.1 million or 30.0% growth versus 2Q05, from R$ 7.0 million to R$ 9.1 million, mainly attributed to CPMF tax in the amount of R$ 1.2 million due to the amortization of debt in the capital markets.

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Second Quarter 2006 Results
August 14, 2006
Page 6 of 11

4. Financial expenses and passive monetary variation

4.1. Financial expenses

In 2Q06 recorded a R$ 50.3 million or 28.2% drop due to:

		2Q05		2Q06		Chg.		%
Financial expenses
Interest and charges on domestic loans and financing		126.9		131.1		4.2		3.3
Interest and charges on international loans and financing		38.5		25.4		(13.1)		(34.0)
Taxes over offshore remittances		2.2		2.4		0.2		9.1
Other financial expenses		8.5		11.3		2.8		32.9
Provisions		20.2		(11.7)		(31.9)		(157.9)
Total financial expenses		196.3		158.5		(37.8)		(19.3)
Financial revenues		18.2		30.7		12.5		68.7
Financial expenses net of revenues		178.1		127.8		(50.3)		(28.2)

• R$ 4.2 million increase in interest on domestic loans and financing regarding the 8^th debenture issuance in June 2005 and the credit rights investment fund in March 2006;
• R$ 13.1 million drop in interest on international loans and financing due to the amortization of the Eurobond that matured in July 2005;
• R$ 31.9 million decrease in provision for interest related to legal contingencies, due to lower provision during the quarter.

Financial revenues grew R$ 12.5 million or 68.7%, mainly as a result of interest over settlements, agreements and interest over investments.

4.2. Passive monetary variation

Passive monetary variation recorded a R$ 284.9 million increase, resulting from a lower Real appreciation versus US Dollars (0.4%) in 2Q06 in comparison to 2Q05 (11.8%) .

		2Q05		2Q06		Chg.		%
Monetary variation over loans and financing		22.4		18.1		(4.3)		(19.2)
Exchange variation over loans and financing		(278.0)		11.2		289.2		(104.0)
		(255.6)		29.3		284.9		(111.5)

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Second Quarter 2006 Results
August 14, 2006
Page 7 of 11

5. Operating indicators*

As shown below, the Company continues to expand its services.

Operating indicators		2Q05		2Q06		Chg. %
Water connections (1)		6,431		6,538		1.7
Sewage connections (1)		4,817		4,938		2.5
Population directly served - water (2)		22.5		22.6		0.4
Population directly served - sewage collection (2)		18.2		18.4		1.1
Number of employees		17,577		17,289		(1.6)
Operational productivity (3)		640		664		3.8

(1) In 1,000 units at the end of the period
(2) Million Inhabitants at the end of the period. Does not include wholesale services
(3) Number of water and sewage connection per employee
* Figures not reviewed by the independent auditors

6. Loans and financing

The Company’s total debt to be paid until the end of the year is of R$ 351 million, out of which only R$ 66 million is denominated in US Dollars.

(R$ million)
DEBT PROFILE
INSTITUTION		2006		2007		2008		2009		2010		2011		2012  and  onwards		TOTAL
DOMESTIC
Banco do Brasil		100		213		233		253		275		300		775		2,149
Caixa Econômica Federal		22		48		52		55		60		64		203		504
Debentures		50		277		-		749		291		351		-		1,718
FIDC - SABESP I		14		55		55		56		56		14		-		250
BNDES		16		32		31		31		31		31		28		200
Others		1		4		6		5		5		5		-		26
Interest and charges		82		20		-		-		-		-		-		102
Domestic Total		285		649		377		1.149		718		765		1,006		4,949
INTERNATIONAL
World Bank		5		5		-		-		-		-		-		10
Société Génerale		1		-		-		-		-		-		-		1
IDB		49		97		69		69		69		69		533		955
Eurobonds		-		-		487		-		-		-		-		487
JBIC		-		-		-		-		-		-		8		8
Interest and charges		11		-		-		-		-		-		-		11
International Total		66		102		556		69		69		69		541		1,472
Total		351		751		933		1,218		787		834		1,547		6,421

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Second Quarter 2006 Results
August 14, 2006
Page 8 of 11

7. Conference call and webcast
English:	August 17, 2006
	12:00 pm - US EST
	Ph: +1 (973) 935-8893
	Conference code: 7739649
Portuguese:	August 17, 2006
	9:00 am - US EST
	Ph: (5511) 2101-4848
	Conference code: Sabesp

For additional information please contact the Investor Relations Department: Mario Sampaio ((5511) 3388-8664 / maasampaio@sabesp.com.br) or Angela Beatriz Airoldi ((5511) 3388-8793 / 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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Second Quarter 2006 Results
August 14, 2006
Page 9 of 11

Income Statement

 

Brazilian Corporate Law					R$ thousand
		2Q06		2Q05		%
Sales/Services Gross Revenues		1,422,064		1,330,236		6.9
Water Supply - Retail		748,238		700,459		6.8
Water Supply - Wholesale		64,204		58,434		9.9
Sewage Collection and Treatment		609,622		571,343		6.7
Other Services		-		-		-
Gross Revenue Deductions (Cofins/Pasep)		(108,656)		(98,891)		9.9
Net Sales		1,313,408		1,231,345		6.7
Cost of Goods and/or Services Sold		(666,685)		(594,793)		12.1
Gross Profit		646,723		636,552		1.6
Selling Expenses		(132,177)		(131,550)		0.5
General & Administrative Expenses		(74,472)		(94,352)		(21.1)
Net Interest Income (Expense)		(147,438)		84,263		(275.0)
Operating Result		292,636		494,913		(40.9)
Non Operating Expenses (Income)		(558)		1,428		(139.1)
Income Before Taxes		292,078		496,341		(41.2)
Provivision for Income Tax/Social Contribution		(114,639)		(155,145)		(26.1)
Provivision for Deferred Income Tax/Social Contribution		6,907		3,325		107.7
Extraordinary Item Net of IT and SC		(8,780)		(8,780)		-
Net Income		175,566		335,741		(47.7)
Shares Outstanding (1000 shares)		28,479,577		28,479,577		-
EPS (R$/1000 shares)		6.16		11.79		(47.7)
Depreciation and Amortization		151,133		149,538		(1.1)
EBITDA		591,207		560,188		(5.2)
% of net sales		45.0%		45.5%		-

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Second Quarter 2006 Results
August 14, 2006
Page 10 of 11

Balance Sheet

Brazilian Corporate Law	R$ thousand
ASSETS		06/30/2006		06/30/2005
Cash and Cash Equivalents		336,012		877,949
Accounts Receivable, net		1,214,648		1,115,441
Accounts Receivable from Shareholders		225,612		174,742
Inventory		32,035		25,040
Taxes and contributions		22,161		30,421
Other Receivables		43,904		47,830
Total Current Assets		1,874,372		2,271,423
Accounts Receivable, net		297,250		278,687
Accounts Receivable from Shareholders		823,558		757,727
Indemnities Receivable		148,794		148,794
Judicial Deposits		30,723		15,395
Taxes and contributions		310,827		272,293
Other Receivables		48,879		31,064
Total Long-Term Assets		1,660,031		1,503,960
Investments		740		5,100
Permanent Assets		14,165,702		13,981,250
Deferred Assets		15,389		35,277
Total Permanent Assets		14,181,831		14,021,627
Total Assets		17,716,234		17,797,010
LIABILITIES		06/30/2006		06/30/2005
Suppliers and Constructors		88,032		46,553
Loans and Financing		642,461		1,420,176
Salaries and Payroll Charges		224,208		169,579
Provivion for Judicial Pendencies		10,921		30,979
Interest on Own Capital Payable		381,158		183,526
Taxes and contributions payable		145,150		129,115
Taxes and contributions		72,348		69,980
Other Payables		98,612		86,110
Total Current Liabilities		1,662,890		2,136,018
Loans and Financing		5,778,076		6,041,965
Taxes and contributions payable		244,567		264,998
Taxes and Contributions		139,454		131,615
Provision for Contingencies		602,964		528,084
Pension Fund Obligations		299,118		249,736
Other Payables		110,777		103,362
Total Long-Term Liabilities		7,174,956		7,319,760
Capital Stock		3,403,688		3,403,688
Capital Reserves		100,760		72,824
Revaluation Reserves		2,483,566		2,574,594
Profit Reserves		2,470,269		1,863,389
Retained Earnings		420,105		426,737
Shareholder's Equity		8,878,388		8,341,232
Total Liabilities and Shareholder's Equity		17,716,234		17,797,010

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Second Quarter 2006 Results
August 14, 2006
Page 11 of 11

Cash Flow

Brazilian Corporate Law		R$ thousand
Description		Jan-Jun/06		Jan-Jun/05
Cash flow from operating activities
Net income for the period		503,482		487,111
Adjustments for reconciliation of net income
Deferred income tax and social contribution		(3,187)		(15,590)
Provisions for contingencies		25,556		68,015
Liabilities related to pension plans		29,977		34,255
Loss in the wirte-off of property, plant and equipment		2,321		2,332
Loss in the write-off of assets		863		-
Gain with the sale of property		(1,007)		-
Depreciation and Amortization		297,846		294,999
Interest calculated on loans and financing payable		321,369		334,763
Foreign exchange loss on loans and financing		(39,789)		(264,052)
Monetary exchange loss on interest on own capital		-		715
Passive monetary exchange variation and interest		9,917		12,812
Active monetary exchange variation and interest		(6,911)		(2,479)
Provisions for bad debt		124,118		106,257
(Increase) decrease in assets
Clients		(91,228)		(212,297)
Accounts receivable from shareholders		(29,067)		(95,155)
Inventories		4,035		4,564
Other accounts receivable		(19,875)		(14,542)
Changes in Long Term Assets
Clients		(86,182)		(60,233)
Accounts receivable from shareholders		(46,243)		(13,608)
Judicial deposits		(6,866)		794
Other accounts receivable		(15,959)		(3,088)
		(291,385)		(393,565)
Increase (decrease) in liabilities
Accounts payable to suppliers and contractors		10,251		(5,025)
Salaries and payroll charges		106,919		62,351
Taxes and contributions		17,555		(6,157)
Other accounts payable		(20,965)		2,308
Contingencies		(20,000)		444
Changes in Long Term Liabilities		-		-
Pension plan		(7,416)		(6,695)
Other accounts payable		2,288		10,674
		88,632		57,900
Net cash from operating activities		1,061,802		723,473
Cash flow from investing activities
Acquisition of property, plant and equipment		(331,506)		(240,663)
Sale of property, plant and equipment		2,188		-
Increase in Deferred Assets		(55)		(53)
		-		-
Net cash used in investing activities		(329,373)		(240,716)
Cash flow from financing activities
Loans and Financing - long term
Funding		320,528		1,061,414
Payments		(838,963)		(706,227)
Interest on own capital payment		(158,155)		(65,552)
Net cash from financing activities		(676,590)		289,635
Net increase (decrease) in cash equivalents		55,839		772,392
Cash and cash equivalents at the beginning of the period		280,173		105,557
Cash and cash equivalents at the end of the period		336,012		877,949
Change in Cash		55,839		772,392
Additional information on cash flow:
Interests and taxes paid to loans and financing		346,245		320,422
Capitalization of interest and financial charges		(6,829)		(14,411)
Payable income tax and social contribution		221,150		183,405
Property, plant and equip. received as donations and/or paid in		21,940		7,533
COFINS and PASEP taxes payable		219,429		184,130
Balancing accounts		-		(715)

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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.

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