HEI net falls 3%
as utility sees drop-off

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By Russ Lynch
rlynch@starbulletin.com

Hawaiian Electric Industries Inc.'s net income for the first quarter of 2002 fell 3 percent as a slowdown in the electricity utility business cut into continuing improvement at its American Savings Bank subsidiary.

Announcing its earnings yesterday, HEI said electricity sales dropped, but it had more to do with cooler weather requiring less air-conditioner use than with the post-Sept. 11 decline in the Hawaii economy.

HEI reported a profit of $26.9 million, or 74 cents a share, for the three months through March 31, compared to a net of $27.7 million, or 84 cents a share, a year earlier. Per-share figures are not directly comparable, HEI said, because the company has more shares outstanding after a November stock offering.

A year-over-year net income gain of $1.5 million at American Savings helped to counter a net income dip of $1 million in the utilities and some businesses, HEI said.

"We had anticipated that the Hawaii economic downturn post Sept. 11 would have a negative impact on kilowatt-hour sales," said Robert F. Clarke, HEI chairman, president and chief executive officer. But he said the decline was more a result of lower temperatures, requiring less cooling energy. Other expenses were down because of cost-cutting efforts, he said.

The company, which previously ran into trouble with overseas investments and cut itself back to its biggest businesses -- providing electricity on three of the four major islands and a highly successful financial business in American Savings -- now has a much simpler financial report than in the past.

It showed a first-quarter net income from the electric utilities on Oahu, Maui and the Big Island of $20.4 million, down 4.7 percent from $21.4 million in 2001.

HEI said the difference was due to higher depreciation expenses as well as lower electricity sales volume.

The only other major HEI subsidiary, American Savings, posted net income of $13.4 million in the latest quarter, up 12.6 percent from $11.9 million in the 2001 quarter.

HEI's corporate revenues of $278.3 million in the latest quarter were down 12.6 percent from $318.4 million in the 2001 quarter.