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HEI(HE) - 2024 Q2 - Earnings Call Transcript
HEHEI(HE)2024-08-09 23:15

Financial Data and Key Metrics Changes - For Q2 2024, the company recorded a consolidated net loss of 1.3billionor1.3 billion or 11.74 per share, primarily due to significant one-time losses related to wildfire liabilities and goodwill impairment [15][16] - The utility reported a net loss of 1.23billionforthequarter,whichincludeda1.23 billion for the quarter, which included a 1.71 billion loss due to the accrual of estimated wildfire liabilities [15][16] - Excluding one-time losses, consolidated core net income was 49.1million,downfrom49.1 million, down from 54.6 million in Q2 2023 [16][17] Business Line Data and Key Metrics Changes - Utility core net income decreased to 43.9millionfrom43.9 million from 45.3 million year-over-year, driven by higher operational and wildfire mitigation expenses [17] - American Savings Bank (ASB) core net income increased slightly to 20.7millionfrom20.7 million from 20.2 million, attributed to prudent expense management and higher non-interest income [17] Market Data and Key Metrics Changes - The utility's capital budget for wildfire mitigation efforts is nearly 120million,representingover35120 million, representing over 35% of the total budget [10] - The utility has launched a Public Safety Power Shutoff program to enhance safety during high-risk conditions [9] Company Strategy and Development Direction - The company is focused on investing in a sustainable and resilient future for Hawaii, including enhancing wildfire safety strategies and strengthening infrastructure [9][11] - A comprehensive review of strategic options for ASB is ongoing, with no set timetable for potential actions [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the proposed settlement related to the Maui wildfires, which aims to provide a clearer path forward for the company [6][21] - The company does not intend to raise rates to cover settlement costs and believes it can meet future needs without impacting customers [35] Other Important Information - The proposed settlement includes a total payment of over 4 billion to settle wildfire-related claims, with HEI's contribution being $1.99 billion pretax [6][15] - A hearing is scheduled for August 13 to address the claims of insurance companies related to the settlement [7][27] Q&A Session Summary Question: Confidence in finalizing the settlement - Management highlighted the importance of the settlement terms and the 90-day period for discussions between plaintiffs and insurers to resolve claims [20][21] Question: Capital spending and financing options - The company is working on long-term capital plans and aims for investment-grade credit metrics to lower customer bills [22][23] Question: Court's role in insurer claims - Management explained the ongoing court proceedings and the potential outcomes regarding insurer claims against individual plaintiffs [26][27] Question: Settlement size and insurer involvement - Management expressed cautious optimism about the settlement terms and the potential for resolution between plaintiffs and insurers [30][31]