Hawaiian Electric Industries Inc. topped $1 billion in quarterly revenue for the first time due to higher prices the electric utility is paying for fuel oil and strong loan growth from subsidiary American Savings Bank.
Revenue jumped 37.7% to $1.04 billion from $756.9 million in the year-earlier period, the holding company reported Monday. It was the most revenue in a quarter since the third quarter of 2008 when HEI generated revenue of $915.4 million.
The electric utility accounted for the bulk of that gain as its revenue soared 40.7% to $956 million from $679.5 million in the year-earlier period. Oil prices, which have driven up the utility’s fuel costs, more than doubled to $383 million in the third quarter from $180 million in the year-earlier quarter. Customers have been paying higher bills mainly because oil and purchased power costs are up.
HEI, parent of the state’s largest utility, reported third-quarter net income per common stock of $62.1 million, or 57 cents a share. That beat analysts’ consensus estimate of 55 cents a share. However, the earnings were down 2.1% from $63.4 million, or 58 cents a share, in the year- earlier quarter.
HEI President and CEO Scott Seu said the earnings reflected a good performance and the benefits of its combination of companies.
“The utility performance was steady and we were able to offset some of the pressures we’ve seen related to inflation, interest rates, O&M (operations and maintenance) and fuel costs,” Seu said on a conference call with analysts. “Our utility outlook for the year has improved since our last webcast. We now expect the utility to end the year closer to the midpoint of its guidance range, better than the lower end that we had forecast last quarter.”
Seu said HEI’s clean-energy transition is “one of the most powerful ways to reduce exposure to fuel price spikes, stabilize customer bills and cut greenhouse gas emissions, all while maintaining a healthy utility.”
He said HEI continues to press forward on all fronts in bringing new utility-scale renewable generation at contracted prices below the current cost of oil.
HEI said its solar-plus-storage project, which is the largest in the state, went online July 31 and is now generating energy at less than half the cost of oil. Three more solar-plus-storage projects are slated to come online in early 2023, with several others due in 2024. A large battery storage project is also expected to go into service on Oahu by mid-2023.
“We have over 400 megawatts of renewable capacity and over 2 gigawatt-hours of battery storage approved and active under Stage 1 and 2 RFPs (requests for proposal), and we’re continuing to seek more,” Seu said. “We’re filing our final draft Stage 3 RFP for Hawaii island today (Monday), and if accepted by the PUC, target launching it before year-end.”
HEI said rooftop solar continues to grow and there is strong interest in its battery bonus program, which received 1,400 applications totaling 10.9 megawatts in September alone.
Last month, the state Public Utilities Commission issued an order that will lead to a new rate structure designed to encourage customers to reduce electricity during peak times when energy costs are high and shift load to the time of day when cheaper renewable resources are plentiful.
Net income for HEI’s utility segment, which covers Oahu, Maui County and Hawaii island, dipped 1% in the quarter to $49.8 million from $50.3 million in the year-earlier period.
American Savings, the state’s third-largest bank, posted a 7.7% gain in net income in the third quarter on the strength of a double-digit increase in loans.
The bank reported separately Oct. 28 that its loans rose 11% to $5.69 billion from the year-earlier quarter and saw them jump 19.2% on an annualized basis from the April-June period.
American Savings’ net income increased to $20.8 million from $19.3 million in the year-earlier quarter. The bank’s earnings jumped 18.8% from the previous three months.
“The bank had another strong quarter, continuing to demonstrate strength in a rising rate environment,” Seu said. “Bank results have benefited from higher interest rates, strong loan growth and continued favorable credit trends.”
Seu said that due to expected continued positive trends for the rest of the year it is raising the bank’s 2022 guidance to a range of 72 cents a share to 76 cents a share and boosting HEI’s consolidated EPS guidance range by 8 cents to a new updated range of $2.08 to $2.20 for the year.
On Thursday HEI announced it was maintaining its quarterly dividend at 35 cents a share. It will be payable Dec. 9 to shareholders of record at the close of business Nov. 22.
HEI’s stock fell 54 cents to $37.35 after the earnings were announced.
Third-Quarter net
$62.1 million
Year-earlier net
$63.4 million
