Hawaiian Electric Industries (HE) Q2 2024 earnings summary

Executive summary

• Agreement in principle to settle all Maui wildfire tort claims for $4.04 billion, with HEI and Hawaiian Electric contributing $1.99 billion over four years, providing clarity on litigation and future direction.

• Q2 2024 net loss of $1.30 billion ($11.74/share), driven by a $1.71 billion pre-tax accrual for wildfire settlement and goodwill impairment at American Savings Bank (ASB); core net income was $49.1 million and core EPS $0.44.

• Excluding wildfire and impairment, core operations at both the utility and ASB remained strong, with ASB showing improved profitability, stable deposits, and high liquidity.

• Utility advanced wildfire mitigation, grid hardening, and renewable energy projects, including PSPS program and solar-plus-storage deployments.

• Substantial doubt raised about the company's ability to continue as a going concern due to wildfire liabilities and unresolved financing plans.

Financial highlights

• Q2 2024 consolidated net loss of $1.3 billion, or $11.74 per share, driven by wildfire settlement accrual and goodwill impairment.

• Core net income (excluding one-time items) was $49.1 million ($0.44 per share), down from $54.6 million ($0.50 per share) year-over-year.

• Q2 2024 revenues were $897 million, nearly flat year-over-year.

• Utility segment net loss of $1,229.4 million; ASB net loss of $45.8 million, reflecting $82.2 million goodwill impairment; core net income for utility was $43.9 million, and for ASB $20.7 million.

• Maui wildfire-related net expenses for Q2 2024 were $1.72 billion after insurance and deferral treatment.

Outlook and guidance

• No rate increases planned to fund the settlement payments; first payment expected no earlier than mid-2025, pending judicial approval and insurance claim resolution.

• Financing plan for settlement includes debt, equity, and other options; utility dividend to HEI suspended until plan progresses.

• Management believes current cash and available credit are insufficient to fund planned expenditures and wildfire settlements.

• Ongoing regulatory proceedings on grid modernization, resilience, and renewable integration.

• Comprehensive review of strategic options for ASB ongoing; no set timetable or assurance of outcome.