Thanks to shedding some money-losing overseas investments and pulling in another strong performance from its American Savings Bank subsidiary, Hawaiian Electric Industries Inc. posted a 34 percent increase in its second-quarter profit. Hawaiian Electric
profits from pullbackBy Russ Lynch
rlynch@starbulletin.com
The company yesterday reported a net income of $25.6 million, or 76 cents a share, for the three months through June 30, up from a net of $19.1 million, or 59 cents a share, year earlier.
The bottom line from its traditional business, providing electric power on the major islands, slipped despite the way air conditioners cranked up power use during hot weather in April and May. Kilowatt-hour sales were up 1.4 percent for the quarter.
What made the difference, the company said, was that it had to pay more than last year for power it bought from other producers.
The result was a 5.4 percent dip in net profit from the electricity business, still the bulk of what HEI does, to a net of $22.7 million in the latest quarter from $24 million in the second quarter of 2000.
That $1.3 million shortfall was partially made up for by an $800,000 increase in the net profit of American Savings, to $10.2 million in the latest quarter from a year-earlier $9.4 million.
But the biggest year-over-year plus was a plug in the drain of HEI's international power business. Getting out of its investment in East Asia Power Resources in the Philippines left HEI with a net loss from international power of $900,000 in the latest quarter, compared to a loss of $8.9 million in the second quarter of 2000.
The result is that HEI's core businesses are performing well and it has succeeded in getting out of investments that didn't work, even though it took some write-offs in the process, the company said.
"We had a good second quarter," said Robert F. Clarke, HEI chairman, president and chief executive officer. "Earnings were up compared with the same quarter last year due to an 8.6 percent increase in savings bank net income and contraction of our international operations."
"Our savings bank turned in a strong performance this quarter," Clarke said.
Although it spent more on personnel and technology, the bank was able to increase its net interest income.
Despite a decline the interest income from loans and the interest cost of attracting deposits, the amount of loans and other assets that were earning interest for the bank increased.