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Hawaiian Electric Industries Inc. topped $1 billion in revenue for the second straight quarter as customers paid higher bills for soaring fuel costs and subsidiary American Savings Bank achieved its best loan growth in more than a decade.
The holding company for utility Hawaiian Electric and the state’s third-largest bank reported Tuesday that revenue rose 32.3% to $1.02 billion in the fourth quarter from $770 million in the year-earlier period. The last two quarters marked the only time the company has topped $1 billion in revenue.
Its previous high was the third quarter of 2008 when HEI generated revenue of $915.4 million.
HEI noted that its utility customers have been paying higher bills mainly because oil and purchased power costs are up. The cost of oil and purchased power is passed through directly to customers with no markup.
“Elevated fuel prices and the resulting customer bill pressures seen in 2022 further highlight the importance of our renewable- energy transition,” HEI President and CEO Scott Seu said in a conference call with analysts. “In 2022 we continue to execute on key elements of the utilities climate change action plan, which targets reducing carbon emissions in 2030, 70% below 2005 levels, and achieving net zero carbon emissions by 2045.”
The electrical utility’s cost for fuel oil nearly doubled last quarter to $391 million from $197 million in the year-earlier period, while purchased power rose 3.8% to $186 million from $179 million. The utility’s revenue jumped 33.4% to $924 million from $693 million.
American Savings, meanwhile, saw its loans jump 14.7% to $6 billion in the fourth quarter from $5.21 billion in the year-earlier period.
“Our strong results for the year reflect the strategic benefit of our combination of companies,” Seu said in a statement.
HEI’s net income last quarter rose 5.2% to $57.3 million, or 52 cents a share, to miss analysts’ consensus estimate of 55 cents. In the year-earlier period, HEI’s net income was $54.5 million, or 50 cents a share.
For the year, HEI’s net income slipped 2% to $241.1 million, or $2.20 a share, compared with $246.2 million, or $2.25 a share. Revenue rose 31.3% to $3.74 billion from $2.85 billion in 2021.
In the fourth quarter the utility’s net income rose 15.7% to $48.6 million from $42 million in the year- earlier period.
“The utility delivered good results, growing net income despite challenges from multiple different macroeconomic pressures, while continuing to significantly advance our clean-energy transition and support customers experiencing financial difficulties,” Seu said.
The bank’s net income fell 19.1% in the fourth quarter to $17.9 million from $22.1 million in the year-earlier period. But the earnings were impacted by $2.7 million it set aside in the fourth quarter for potential loan losses, compared with a year ago when it returned $3.5 million from its loan-loss reserve to its income statement.
“Our bank results reflect strong execution by our team, solid credit quality and a healthy Hawaii economy,” Seu said. “Excluding unique pandemic recovery-related items that benefited the bank’s 2021 net income, we saw meaningful growth in earnings year over year. We also saw the strongest loan growth in recent memory, reflecting great work by the ASB team and the resilience of Hawaii’s consumers and businesses. We continued to see positive credit trends despite the inflationary environment, and rising interest rates benefited net interest margin and profitability.”
On Friday, HEI announced it was increasing its quarterly dividend by a penny to 36 cents a share. It will be payable March 10 to shareholders of record at the close of business Feb. 23.
HEI’s stock fell $1.25 to $41.77 after the earnings were announced.
FOURTH-QUARTER NET
$57.3 million
YEAR-EARLIER NET
$54.5 million
89