Hawaiian Electric Industries (HE) Q3 2024 earnings summary

Executive summary

• Signed definitive $1.99 billion settlement agreements for Maui wildfire tort litigation, payable over four years starting late 2025, resolving a key financial uncertainty and enabling a clearer path to recovery.

• Reported a consolidated net loss of $104.4 million for Q3 2024, driven by wildfire-related accruals and a $35.2 million asset impairment at Pacific Current; nine-month net loss was $1.36 billion due to $1.92 billion in wildfire accruals.

• Resolved prior going concern issue following successful equity issuance and liquidity actions, including a $557.7 million equity raise and new credit facilities.

• Utility and bank operations remained solid, with ASB showing improved profitability, net interest margin expansion, and a stable, well-collateralized deposit base.

• Strategic reviews ongoing for both Pacific Current and the bank; $35.2 million non-cash impairment recorded for Pacific Current.

Financial highlights

• Q3 2024 GAAP net loss of $104.4 million (EPS: -$0.91) due to wildfire-related expenses and asset impairment; core net income (non-GAAP) was $52.2 million (EPS: $0.46).

• Wildfire-related expenses included a $203 million pre-tax accrual for estimated tort-related legal claims, net of insurance recoveries and deferrals.

• Q3 2024 revenues were $938.4 million, up from $901.9 million in Q3 2023; nine-month revenues were flat at $2.73 billion.

• Bank segment recorded a $82.2 million goodwill impairment in Q2 2024; Pacific Current recorded a $35.2 million asset impairment in Q3 2024.

• Utility core net income was $43.7 million, down from $53.8 million year-over-year, mainly due to higher O&M expenses.

Outlook and guidance

• First settlement payment of ~$479 million expected in late 2025; remaining payments classified as long-term liabilities.

• Utility to file a comprehensive wildfire mitigation plan by January 2025; grid modernization and resilience efforts ongoing.

• Ongoing regulatory proceedings on performance-based regulation, renewable energy procurements, and grid modernization, with next rate plan to begin January 2027.