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The Honolulu Advertiser

Posted on: Tuesday, April 26, 2005

HEI profits down despite gains at American Savings

 •  Bank of Hawaii enjoys 14 percent rise in profits
 •  Central Pacific's earnings per share up 23 percent

Advertiser Staff

First-quarter profits at Hawaiian Electric Industries fell because of higher operations and maintenance costs resulting from increased use of electricity in a growing Hawai'i economy. The decline came despite earnings gains at HEI's American Savings Bank subsidiary.

First quarter 2005

  • HEI revenue: $472.6 million, up 8 percent from a year ago
  • HEI net income: $24.1 million, down 22 percent from last year
  • HEI earnings per share: 30 cents a share, down 25 percent from a year ago
  • HECO net income: $12.4 million, down 38 percent from a year ago
  • KWH sales: down 1 percent
  • American Savings Bank net income: $17.8 million, up 11.5 percent from a year ago



Reasons

  • Hawaiian Electric Industries said lower profits at its electric utility subsidiary more than offset earnings gains at its American Savings Bank unit.
  • Higher operations and maintenance costs at Hawaiian Electric Co. hurt earnings. Those costs rose by $8 million, which including higher retirement benefit expenses.
  • American Savings Bank profits rose because of increases in deposits and loans, good loan quality, and reversal of loan loss reserves.



What they are saying

“First-quarter results were down as we continued to experience increased operations and maintenance costs at our utilities to ensure reliable electric service to our customers.”

— Robert Clarke | Chairman, president and chief executive



What's next

  • Overhaul repairs and maintenance will start on Waiau 10, an O'ahu generator used during peak hours, this quarter.
  • Interest margins at American Savings Bank could continue to be pressured by a trend of higher interest rates.
  • The credit rating of HEI and its units could change after Standard & Poor's last week downgraded its outlook to "negative" from "stable." The debt rating agency said higher costs and no rate increases put pressure on its finances.