HEI net up 12.7%
on bank results

Cool weather and the
slow economy kept electricity
consumption down

By Russ Lynch
Star-Bulletin

Despite flat income from electricity sales in its utility business, Hawaiian Electric Industries Inc. today reported a 12.7 percent increase in its first-quarter profit.

The rise to $22.2 million, or 69 cents a share, from a profit of $19.7 million, or 63 cents a share, in the year-earlier quarter was mostly due to experiencing the first full quarter of results from the former Bank of America operations in Hawaii, HEI said.

Its American Savings Bank subsidiary acquired Bank of America's branches in December.American Savings had an operating profit of $16.1 million in the three months ending March 31, up 30.9 percent from an operating profit of $12.3 million in the 1997 quarter.

"The bank performed well during the quarter, in line with our expectations," said Robert F. Clarke, HEI president and chief executive officer.

The electric utility subsidiaries reported an operating profit of $42.6 million in the latest quarter, up 10.4 percent from a profit of $38.6 million in the year-earlier period. Clarke said kilowatt-hours were flat, dampened by Hawaii's poor economy and the fact that the weather was cooler than last year. Cool weather means lower use of electricity to run air conditioners.

However, the company was able to improve utility operating profits by adjusting the timing of expenses and by containing costs, Clarke said.

HEI had a $2.9 million operating loss on its other businesses, compared with a $1.5 million loss from those businesses in the year-earlier period.

The company, the parent of Hawaiian Tug & Barge Corp. and Young Brothers Ltd., said it made money from maritime operations and passive investments, but that was more than countered by operating losses and expenses at the parent and real estate and independent power subsidiaries.

HEI's total first-quarter revenues were $375.6 million this year, up 4.6 percent from $359.2 million in the 1997 quarter. HEI gets 69 percent of its revenues from utilities and 27 percent from the savings bank.