Bank profits help HEI’s
By Russ Lynch
earnings rise 1.8 percent
Star-BulletinHawaiian Electric Industries Inc. had a second-quarter net profit up 1.8 percent a year earlier, thanks to a 23 percent increase in operating profit at its American Savings Bank subsidiary and a smaller rise in the net in its electricity business.
The parent company yesterday reported a net profit of $22.8 million, or 71 cents a share, for the quarter ended June 30, compared with a net of $22.4 million, or 70 cents a share in the year-earlier quarter.
HEI's second-quarter revenues of $369.7 million were up 2.5 percent from $360.7 million in the 1998 quarter. The figures from the second quarter of last year had included a $528,000 cost item, a loss from discontinued operations, that wasn't present this year. If that had not been present in the 1998 period, HEI would have had a slight profit decrease this year.
Even though HEI's earnings topped expectations of analysts, the Honolulu-based company's shares closed down 25 cents to $35 on the New York Stock Exchange amid a broad market sell-off.
With Hawaii's economy still dragging, the company was pleased to have been able to keep the earnings about where they were last year, said Robert F. Clarke, HEI chairman, president and chief executive.
Revenues from Hawaiian Electric Co. and its electricity generating subsidiaries totaled $252.3 million in the latest quarter, as warm weather cranked up air conditioner use.
That represented a 3.2 percent increase from electricity revenues of $244.6 million in last year's second quarter. However, operating income from electricity was up by a lower percentage, 2.7 percent, at $19.2 million, compared with $18.7 million a year ago.
"Higher costs offset in part the impact of improved sales," Clarke said.
The savings bank's revenues in the latest quarter were $101.8 million, up 0.5 percent from $101.3 million in the 1998 quarter. But the operating profit at American Savings in the latest quarter was $9.1 million, up 23 percent from $7.4 million in the year-earlier period.
Clarke said American Savings improved its interest rate spread, the difference between what it pays to attract deposits and what it earns on the money, to 3.21 percent in the latest quarter from 3.12 percent in the 1998 period.
Some of the gains from electricity and the savings bank were countered by deficits in HEI's other businesses, which together came to a loss of $5.5 million in the latest quarter, compared with a loss of $3.1 million in the 1998 quarter.
The company said the higher losses in those businesses were due to higher interest expense at the corporate parent.
HEI owns the maritime freight businesses Hawaiian Tug & Barge Corp. and Young Brothers Ltd. and several independent power and integrated energy businesses in Asia and the Pacific.
For the first half of 1999, HEI had a profit of $43.5 million, down 2.5 percent from $44.6 million in the first half of last year. Half-year revenues of $721.9 million were down 1.8 percent from $735.5 million.
