Hawaiian Electric Industries Inc. reported a $1.43 billion net loss for 2024 on Friday, though nearly all of the immense figure reflects an obligation to pay Maui wildfire damage claims over several years.
The parent of Hawaiian Electric, according to company leaders, made progress in 2024 regaining financial strength, and has more money available than ever before to address needs that include wildfire risk mitigation and paying its $2 billion share of a pending $4 billion litigation settlement over the Aug. 8, 2023, disaster that destroyed most of Lahaina and killed 102 people.
“2024 was a year of really significant achievements in the face of unprecedented challenges facing our company,” Scott Seu, HEI president and CEO, told stock analysts on a conference call. “I really feel that we’ve made rapid progress towards rebuilding the financial strength of our enterprise.”
The company’s $1.43 billion loss in 2024 compared with a $199 million profit in 2023.
HEI disclosed in August that it had booked the settlement obligation as a balance sheet loss during the second quarter, recording a $1.27 billion hit to company finances for the three months that ended June 30.
HEI said that in the last three months of 2024, it had a $68 million net loss, compared with a $49 million profit in the same quarter of 2023.
The company reported that core operations, which exclude wildfire expenses, discontinued operations and a devalued power production asset, produced a $124 million profit in 2024, compared with $152 million in 2023.
Hawaiian Electric is the state’s largest utility, with about 472,000 customers on Oahu, Hawaii island, Maui, Molokai and Lanai. The utility contributed a $1.23 billion net loss to HEI’s bottom line stemming from a $1.9 billion loss before tax and insurance impacts.
HEI leaders have previously said utility customers will not pay more for electricity to fund wildfire settlement claims. HEI reported Friday that the typical residential utility bill decreased 7% in 2024.
The utility previously contributed $75 million to a state fund for some wildfire victims, and expects to pay the $1.92 billion balance in four equal annual installments of about $479 million.
To fund the first installment, HEI raised $558 million in September by selling new shares of stock.
HEI also sold a 90.1% stake in American Savings Bank for $405 million in December, though some of those proceeds are to be used to pay down debt and for other purposes.
Seeking approval
To potentially raise debt funding, HEI is seeking approval from the state Legislature to securitize future revenue from customers to obtain a better credit rating that makes borrowing capital less costly. Essentially, the company would pledge reliable customer bill payments to secure debt.
Other funding options the company has include a $250 million credit line and selling up to $250 million in new HEI stock at prevailing market prices over the next few years under a program announced in September.
On Friday, HEI shares closed at $10.76 before the earnings announcement. That was down from $10.97 on Thursday. The day before the wildfire, HEI shares were at $37.36.
Scott Deghetto, HEI chief financial officer, said on the conference call that the company will continue to prudently manage liquidity financing as plans are formulated for additional settlement payments and utility investment needs.
Deghetto also noted that at the end of 2024, HEI had $566 million in cash on hand while Hawaiian Electric had $184 million.
Seu said the company worked in 2024 to bolster liquidity and ensure HEI is in the strongest possible financial position ahead of a finalized settlement.
“With these collective actions, we ended 2024 in the strongest liquidity position in our company’s history,” he said on the conference call.
Seu also said the utility anticipates making its first wildfire settlement payment toward the end of this year or in early 2026.
The $4 billion settlement was announced in August, and is also being funded by the state, Kamehameha Schools, Hawaiian Telcom, Spectrum/Charter Communications and affiliates of West Maui Land Co.
A coalition of 192 insurance companies declined to be part of the deal and later challenged its validity in court. The insurers instead wanted to obtain reimbursement of claims paid to customers with fire losses directly from the settlement payers through litigation.
Earlier this month the Hawaii Supreme Court ruled that state law supported a decision by Circuit Judge Peter Cahill to bar the insurers from such reimbursement as part of the settlement.
“The decision helps move the settlement forward,” Seu said, “bringing increased certainty to those who suffered loss in the Maui wildfires, while providing more clarity for our company’s path toward reestablishing financial stability.”
