Summary of Hawaiian Electric Industries, Inc. Q1 2026 Earnings Call

1Key Financial Results and Metrics

Net Income: $30.5 million ($0.18 per share), up from $26.7 million ($0.15 per share) in Q1 2025.

Core Net Income: $31 million ($0.18 per share), down from $39.8 million ($0.23 per share) in Q1 2025.

Utility Core Net Income: $35.7 million, down from $49.7 million in the prior year, primarily due to increased O&M expenses from severe weather events.

Holding Company Core Net Loss: $4.8 million, improved from $9.9 million in 2025.

Liquidity Position: Approximately $1 billion in liquidity, including cash and credit facilities, positioning the company to manage increased working capital requirements due to rising fuel costs.

2Strategic Updates and Business Highlights

Maui Wildfire Settlement: The company made its first payment of $479 million as part of a comprehensive settlement agreement related to the 2023 Maui wildfires, marking a significant milestone in the recovery process.

Wildfire Mitigation Plan: Submitted an updated wildfire mitigation plan to the Public Utilities Commission (PUC) aimed at reducing wildfire risks and enhancing grid resilience.

Rate Rebasing Proposal: Submitted a joint rate rebasing request, proposing a 5.3% increase in base rates phased over two years, aimed at moderating customer impacts while allowing necessary investments.

Waial Generating Station: Received PUC approval for the repowering project, with an expected CapEx of $157 million in 2026, although total costs may exceed initial estimates due to inflation.

3Forward Guidance and Outlook

2026 Outlook: Expected to be a transitional year with a focus on strengthening financial foundations and addressing affordability amid rising fuel costs.

Rate Rebasing: Anticipated approval of the rate rebasing request, which is designed to address increased operational costs and support long-term financial stability.

Performance Incentive Mechanisms (PIMs): Proposed changes to make PIMs more achievable and aligned with utility performance.

4Bad News, Challenges, or Points of Concern

Increased O&M Expenses: Higher operational costs due to severe weather events and increased insurance premiums are expected to significantly outpace inflation in 2026.

Fuel Cost Volatility: Rising global oil prices are impacting working capital and customer bills, with potential for increased bad debt expenses if high prices persist.

Regulatory Uncertainty: The timeline for the PUC's decision on the rate rebasing proposal and the wildfire liability cap remains unclear, adding uncertainty to future financial performance.

5Notable Q&A Insights

Rebasing Proposal Clarification: No changes to the proposed phasing of the revenue increase were confirmed, and the PUC is expected to provide procedural guidance soon.

Carrying Costs for Waial Project: The company will accrue Allowance for Funds Used During Construction (AFUDC) at its current approved rate until the project is in service.

Rating Agency Feedback: Agencies are focused on the outcomes of rate rebasing, wildfire risk reduction efforts, and the liability cap as factors for potential upgrades.

Bad Debt Expectations: Historical trends suggest that bad debt could increase significantly if elevated fuel prices persist, but the company feels prepared to manage this risk. Overall, Hawaiian Electric Industries is navigating a year of transition with a focus on recovery from past crises, addressing operational challenges, and positioning for future growth amidst regulatory and market uncertainties.