Hawaiian Electric Industries enjoys strong fourth quarter
Both its utility and bank subsidiaries had gains
Hawaiian Electric Industries Inc.'s net income soared 51.2 percent in the fourth quarter as its utility and bank subsidiaries both showed gains over the year-earlier period and the holding company realized an after-tax gain of $9 million for the sale of an interest in a coal-fired electric generating plant in Georgia.
The parent of American Savings Bank and the state's largest utility provider posted earnings of $37.5 million, or 46 cents a share, compared with $24.8 million, or 31 cents a share, a year earlier.
Revenue shot up 20.5 percent to $624.8 million from $518.4 million, helped by a $10 million increase from an interim 3.3 percent rate increase that was approved by the state Public Utilities Commission in late September.
"We had a good fourth quarter," said Robert Clarke, HEI chairman, president and chief executive. "Results were up for all segments."
Net income for the electric utility, which supplies power to more than 400,000 customers, or 93 percent of the state, rose 37.3 percent to $18.2 million from $13.2 million a year ago. Kilowatthour sales were flat due to lower usage per customer and cooler and less humid weather.
American Savings' net income gained 5.7 percent to $17.7 million from $16.7 million as net interest income, which reflects the difference between what the bank pays depositors and what it brings in from loans, rose 7.5 percent to $54.2 million from $50.5 million.
Net interest margin improved to 3.41 percent from 3.10 percent as the yields on loans and mortgage-related securities increased more than the overall cost of the bank's liabilities.
"Strong loan and deposit growth and the bank's ability to control deposit costs more than offset margin compression pressure from the flat yield curve (in 2005)," Clarke said.
For the year, HEI's net income gained 15.5 percent to $126.7 million, or $1.57 a share, from $109.7 million, or $1.38 a share.
The results were affected by a $20.3 million after-tax charge in December 2004 to settle a state franchise tax dispute involving the bank's real estate investment trust, and a $4 million after-tax gain for income note investments in the third quarter of 2004.
Revenue rose 15.2 percent to $2.2 billion from $1.9 billion.
"We were able to hold results relatively constant with 2004, while successfully meeting significant operating challenges in 2005," he said. "Our utility continued providing customers with reliable service even as continued strength in the Hawaii tourism and housing markets kept overall electricity demand hovering near last year's high levels."