HEI's profit plunges 65.8%


POSTED: Friday, February 20, 2009

Hawaiian Electric Industries Inc. said yesterday that fourth-quarter profit fell 65.8 percent, reflecting the slowing economy and the volatile financial market's impacts on its utility and bank operations.




Fourth-quarter net

$13.9 million


Year-earlier net


$40.6 million


Net income for the fourth quarter was $13.9 million, or 16 cents a share, compared with $40.6 million, or 49 cents a share, a year earlier. The earnings per share were more than half the average estimate of 40 cents from three analysts surveyed by Thomson Reuters.

Revenue for the quarter ended Dec. 31 was $799.8 million, up 12.9 percent from $708.2 million a year ago.

Profit for 2008 rose 6.5 percent to $90.3 million, or $1.07 a share, from $84.8 million, or $1.03 a share, in 2007. Revenue for the year was $3.2 billion, up 26.9 percent from $2.5 billion a year ago.

Hawaiian Electric Industries is the parent company for isle utility Hawaiian Electric Co. and American Savings Bank.

“;Demand for electricity dropped significantly, residential loan delinquencies started to rise and bank securities were required to be written down to their fair value,”; Constance Lau, HEI president and chief executive officer, said in a statement. “;While these difficult economic conditions will continue to impact 2009 results as well, strategic initiatives at both our operating companies are laying the groundwork for future improved performance.”;

Full-year net income includes the impact of the bank's previously announced balance sheet restructuring charge of $35.6 million, or 42 cents a share. Excluding the after-tax charge, earnings were $125.9 million, or $1.49 a share.

Utility fourth-quarter net income was $14 million in 2008, down by more than half from $28.2 million in 2007, primarily from the effects of lower sales and higher planned operation and maintenance expenses, Lau said. Utility earnings were $92 million in 2008, up 76.2 percent from $52.2 million in 2007.

Kilowatthour sales declined 3.6 percent compared with the same quarter in 2007, the largest quarterly decline in the company's recent history. Residential and commercial customer usage declined due to customer conservation, energy-efficiency programs and Hawaii's slowing economy, the company said.

Kilowatthour sales were down 1.8 percent year over year, with the decrease coming primarily in the last two quarters.

Bank net income for the fourth quarter was $5.9 million, down 65.7 percent from $17.2 million a year ago. The decline was from lower noninterest income, higher noninterest expenses and higher provisions for loan losses, partially offset by higher net interest income. For 2008, the bank's profit was $17.8 million, down 66.5 percent from $53.1 million in 2007.

In the quarter, the bank had a $6.3 million provision for loan losses, compared to a $1.8 million provision in 2007. The bank set aside $10.3 million for loan losses in 2008, up from $5.7 million in 2007.

The holding and other companies' net losses increased 27.1 percent to $6.1 million in the fourth quarter from $4.8 million in 2007. Net loss was $19.5 million in 2008, compared with $20.5 million in 2007.

The company also said yesterday that it has maintained its regular quarterly cash dividend of 31 cents a share, payable March 10 to stockholders of record at the close of business on March 2. The dividend is equivalent to an annual rate of $1.24 a share.