Hawaiian Electric Industries Inc.’s profit rose 5.5 percent in the fourth quarter as the company rebounded from costs related to its failed sale to Florida-based NextEra Energy Inc.
4TH QUARTER NET: $44.6 million
YEAR-EARLIER NET: $42.3 million
On Tuesday the parent company of the state’s largest electrical utility reported a profit of $44.6 million, or 41 cents per share, compared with $42.3 million, or 39 cents a share, for the same period in 2015. In the fourth quarter of 2015, HEI had a net expense of $2.2 million for its proposed $4.3 billion sale to NextEra. The Hawaii Public Utilities Commission killed the proposed sale in July.
HEI’s revenue for the quarter totaled $617.4 million, down 1.1 percent from $624 million in the year-earlier period.
For all of 2016, HEI’s profit was $248.3 million, or $2.29 per share, compared with $159.9 million, or $1.50 a share, for 2015. The 55 percent increase was largely due to $58.2 million after taxes that HEI got from Next- Era as part of a breakup fee and the related cancellation of a liquefied natural gas contract. HEI had $15.8 million in NextEra-related expenses in 2015.
The state PUC rejected NextEra’s purchase of HEI due to concerns about mainland control and doubts about NextEra’s commitment to the state’s renewable-energy goals. Hawaii law says the electricity HEI sells must come from 100 percent renewable sources by 2045.
In addition to a $90 million breakup fee NextEra paid to HEI, NextEra reimbursed HEI $5 million for transaction expenses.
“Following the termination of our proposed merger with NextEra Energy, HEI and its operating subsidiaries … have moved forward strongly as an independent public company, delivering a consolidated core return on equity of 9.5 percent for 2016,” Connie Lau, president and CEO of Hawaiian Electric Industries, said in a statement.
Excluding the payment from Next-Era, HEI’s core earnings in 2016 were $190.1 million, or $1.75 a share, up from $175.7 million, or $1.65 a share, in 2015.
HEI also is the parent company of American Savings Bank. HEI serves about 95 percent of Hawaii’s population through electrical utilities on Oahu, Maui, Molokai, Lanai and Hawaii island. These utilities contributed $34.1 million in net income for HEI during the fourth quarter, up from $33 million a year earlier.
Lau said HECO and its sister companies invested $318 million last year in the modernization and improvement of Hawaii’s electric grids.
“We achieved an energy portfolio powered by 25 percent renewable resources in 2016,” Lau said. “While advancing towards our 100 percent goal for 2045, we remained focused on increasing customer value. In 2016, Hawaiian Electric management worked hard to reduce overall operation and maintenance expenses from 2015 levels. “
American Savings produced $16.2 million in net income in the fourth quarter compared with $14.9 million a year earlier.
HEI also announced Tuesday that James Ajello, HEI’s executive vice president and chief financial officer, will retire at the end of next month. It named Gregory Hazelton, HEI’s senior vice president, finance, as his successor.
On Monday the board of directors maintained HEI’s quarterly cash dividend of 31 cents a share, payable March 10. The cumulative 2016 dividend is $1.24 a share.
Shares of HEI stock closed Tuesday down 58 cents, or 1.72 percent, at $33.10. The company reported its earnings when the market was open.
