Hawaiian Electric (HEI) Earnings Call Highlights Progress and Challenges

Hawaiian Electric Industries, Inc. ((HE)) has held its Q3 earnings call. Read on for the main highlights of the call.

Hawaiian Electric Industries, Inc. (HEI) recently conducted its earnings call, presenting a balanced outlook that highlighted significant progress in financial stability and wildfire safety measures. However, the call also underscored challenges, including a decrease in utility core net income and increased costs. The uncertainty in legislative and regulatory outcomes adds complexity to the company’s future planning.

Successful Debt Issuance and Improved Liquidity

HEI has successfully bolstered its financial flexibility through a $500 million unsecured debt issuance at Hawaiian Electric. Additionally, the company increased its credit facility capacity by a combined $225 million, enhancing its liquidity position and providing a stronger financial foundation.

Progress on Wildfire Safety Strategy

The company has made significant advancements in its wildfire safety measures. This includes deploying weather stations, AI-assisted high-definition video cameras, and hiring an in-house meteorologist, all aimed at enhancing the company’s ability to manage and mitigate wildfire risks effectively.

Tort Litigation Settlement Advancements

HEI is making strides towards finalizing the Maui wildfire tort litigation settlement agreement. A hearing is expected on January 8, 2026, marking a critical step in resolving this issue and potentially reducing future legal liabilities.

Utility Operational Risk Profile Strengthened

Since the 2023 Maui wildfires, HEI has strengthened its utility operational risk profile. This improvement is part of the company’s broader strategy to enhance operational resilience and reliability.

Decreased Utility Core Net Income

The utility core net income for the quarter was reported at $39.6 million, a decline from $43.7 million in the third quarter of 2024. This decrease is attributed to lower tax benefits, higher legal and consulting costs, and increased expenses related to the wildfire mitigation program.

Increased Legal and Consulting Costs

HEI faced higher legal and consulting costs, which were deferred in 2024, negatively impacting the financial results. These costs are part of the broader challenges the company faces in managing its financial performance.

Uncertain Legislative and Regulatory Outcomes

The company is navigating uncertain legislative and regulatory outcomes, particularly concerning the rate rebasing process and the wildfire fund report. These pending outcomes could have significant implications for HEI’s future financials and regulatory approvals.

Forward-Looking Guidance

During the earnings call, HEI provided forward-looking guidance, reporting a net income of $30.7 million, or $0.18 per share, including $4.5 million in pretax Maui wildfire-related expenses. Excluding these non-core items, the consolidated core net income was $32.8 million, or $0.19 per share. The company projects significant increases in CapEx, with 2025 CapEx expected to reach approximately $400 million and 2026 CapEx projected between $550 million and $700 million. Progress on initiatives such as the wildfire safety strategy and the Maui wildfire tort litigation settlement was also highlighted, with expectations for the first settlement payment no sooner than early 2026.

In summary, Hawaiian Electric Industries, Inc.’s earnings call reflected a balanced outlook, with notable progress in financial stability and wildfire safety measures. However, challenges such as decreased utility core net income and increased costs were also highlighted. The uncertainty in legislative and regulatory outcomes remains a significant factor in the company’s future planning.