Hawaiian Electric Industries Inc.’s net income declined 23.8% in the fourth quarter as operations and maintenance expenses increased from its utility and subsidiary American Savings Bank set aside $11.3 million for potential loan losses.
The parent company of the state’s largest utility reported today that its earnings fell to $50.5 million, or 46 cents a share, from $66.3 million, or 61 cents a share, in the year-earlier quarter. Revenue fell 10.2% to $652.2 million from $726 million in the year-earlier quarter.
For the year, HEI’s net income fell 9.2% to $197.8 million, or $1.81 a share, compared with $217.9 million, or $1.99 a share, in 2019. Revenue dropped 10.2% to $2.58 billion from $2.87 billion in 2019.
“I am proud of the commitment of our employees across the HEI family of companies as we worked to support our customers through this difficult economy, protect fellow employees, and care for our community, all while continuing to advance long-term priorities and deliver solid consolidated financial results,” HEI President and CEO Connie Lau said in a statement. “Based on our utility’s strong financial results, at year end we provided $2 million for Hawaiian Electric to be the founding sponsor of an Aloha United Way program to help families across the islands who are financially impacted by the pandemic pay bills for electric, water, sewer and gas utilities.
HEI’s net income for its utility segment fell in the quarter 5.1% to $43 million from $45.4 million while revenue decreased 11.5% to $571.1 million from $645.3 million.
Kilowatt-hour sales at its three separate utilities were down 6.5% in the fourth quarter from the year-earlier period. Sales fell 5.7% on Oahu, 5.5% on Hawaii island and 12.2% in Maui County, showing how Maui has been disproportionately hit by the loss of visitors. For the year, overall kilowatt-hours sales fell 7.1%.
“In December the Hawaii Public Utilities Commission issued its phase two decision on performance-based regulation, a landmark regulatory framework designed to increase renewable energy, lower costs and improve customer service,” Lau said. “Our utility’s focus on efficiency will enable it to deliver on its customer savings commitments and position it well to operate under the new regulatory framework while continuing to aggressively advance our ambitious clean energy transition.
HEI released its earnings results a day after announcing that higher solar energy and wind production, along with lower consumer demand, enabled Hawaiian Electric to reach a 34.5% consolidated renewable portfolio standard in 2020 and exceed the state mandate of 30%. Hawaiian Electric was at 28.4% RPS in 2019.
The state’s goal is to generate 100% clean energy by 2045. The next RPS milestone required by state law is to reach 40% by 2030.
Separately, American Savings Bank reported on Jan. 29 that its mortgage banking income quadrupled in the fourth quarter but that net income fell 44.5% as the COVID-19 pandemic continued to affect the company’s results. The state’s third-largest bank posted earnings of $15.7 million compared with $28.2 million in the year-earlier quarter after adding $11.3 million to its loan-loss reserve. American Savings finished the year by setting aside $50.8 million for potential loan losses.
“While our bank’s financial results were impacted by pandemic-driven credit risk that we continue to manage closely, they also reflect the benefits of record mortgage originations, good cost control to offset increased costs related to COVID while still investing in core priorities, and conservative liquidity and capital management,” Lau said.
Last week, HEI announced that it was increasing its quarterly dividend by one cent to 34 cents a share. It will be payable on March 10 to shareholders of record on Feb. 25.
HEI’s stock rose 1 cent to $34.73 on Tuesday after the earnings were announced.