HE — Hawaiian Electric Industries, Inc.

HEI Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Income: $30.7 million, or $0.18 per share.
• Core Net Income: $32.8 million, or $0.19 per share, slightly up from $32.7 million or $0.29 per share in Q3 2024.
• Utility Core Net Income: $39.6 million, down from $43.7 million in Q3 2024, attributed to lower tax benefits, increased legal costs, and higher wildfire mitigation expenses.
• Holding Company Core Net Loss: Reduced to $6.8 million from $10.9 million in Q3 2024, due to lower interest expenses and higher interest income.
• Liquidity: Holding company had $40 million in unrestricted cash; the utility had $504 million. Total liquidity available was approximately $1.1 billion.

2. Strategic Updates and Business Highlights

• Continued implementation of wildfire safety measures, including the deployment of weather stations and AI-assisted cameras.
• Progress on the Maui wildfire tort litigation settlement, with court approval expected by January 8, 2026.
• Successful $500 million unsecured debt issuance to finance capital expenditures and improve liquidity.
• Proposed alternative rebasing process for rates to avoid a formal rate case, with a proposal due to the PUC by January 7, 2026.
• Anticipated significant increases in capital expenditures (CapEx) from $400 million in 2025 to $550-$700 million in 2026, driven by wildfire safety and resilience projects.

3. Forward Guidance and Outlook

• Earnings guidance remains uncertain due to pending litigation settlement approvals and the upcoming rate rebasing process. Management indicated that they may consider providing EPS guidance post-settlement approval.
• CapEx is projected to increase significantly over the next three years, with total spending expected between $1.8 billion and $2.4 billion from 2026 to 2028, subject to PUC approvals.

4. Bad News, Challenges, or Points of Concern

• Decline in utility core net income due to increased expenses related to wildfire mitigation and legal costs.
• Ongoing risks associated with the wildfire tort litigation and the effectiveness of the proposed rate rebasing process, which could impact future revenues and earnings.
• Uncertainty regarding legislative movements related to wildfire funding and regulatory changes, which could affect operational strategies.

5. Notable Q&A Insights

• Management confirmed that the utility dividend to the holding company will continue to be based on the needs of the holding company, with no specific changes expected in the near term.
• There is an intention to monetize the remaining 9.9% stake in American Savings Bank, with a potential review in the next six months.
• The PUC's report on the wildfire fund is on track to be submitted before the next legislative session, but specifics on legislative outcomes remain uncertain.

Overall, HEI reported stable financial performance amid ongoing challenges related to wildfire safety and litigation, while strategically positioning itself for future growth through increased capital investments and innovative regulatory approaches.