Hawaiian Electric Industries 2025 Results: Return to Profitability, Wildfire Liabilities Still Impact Capital Structure

Key Financial Highlights

• Return to Profitability: Hawaiian Electric Industries, Inc. (HEI) reported net income for common stockholders of \$123.1 million for the year ended December 31, 2025, a significant turnaround from a net loss of \$1.43 billion in 2024. This swing was largely due to the absence of massive wildfire-related expenses that dominated 2024 results.
• Revenues: Consolidated revenues declined to \$3.09 billion (2025) from \$3.22 billion (2024) and \$3.29 billion (2023), reflecting lower electric utility revenues as well as the absence of American Savings Bank (ASB) revenues following its sale at the end of 2024.
• Earnings Per Share (EPS): Basic and diluted EPS for 2025 were \$0.71, up from a loss per share of \$11.23 in 2024 and \$1.82 in 2023.
• No Dividend Declared: No common stock dividends were declared for 2024 or 2025, compared to \$1.08 per share in 2023.
• Wildfire Expenses: After-tax wildfire expenses (net of insurance and approved deferrals) were \$12.2 million in 2025, a sharp reduction from \$1.4 billion in 2024, but still a material ongoing risk factor.
• Capital Structure: Shareholders’ equity rose to \$1.61 billion (2025) from \$1.48 billion (2024), while long-term debt, net, decreased from \$2.80 billion to \$2.41 billion. The company’s equity ratio improved to 40%, but long-term debt remains at 60% of the capital stack.
• Cash Position: Cash and cash equivalents as of December 31, 2025 stood at \$501.8 million, down from \$750.5 million in 2024, reflecting capital investments, debt repayments, and redemption of preferred stock.

Significant Events and Shareholder-Relevant Issues

• Wildfire Litigation and Liabilities:
  • HEI continues to face significant wildfire tort-related claims, with \$530 million in current liabilities and \$1.44 billion as a noncurrent liability on the balance sheet. The company has set aside a total of \$1.92 billion for estimated wildfire liabilities, which has a direct impact on equity and future profitability.
  • These liabilities are a major risk factor and could affect future dividends, credit ratings, and access to capital markets.
• Redemption of Preferred Stock:
  • On October 15, 2025, the Utilities redeemed all their issued and outstanding cumulative preferred stock (\$34.3 million). This move simplifies the capital structure but also eliminates a class of fixed-dividend securities.
• Completion of American Savings Bank (ASB) Sale:
  • ASB is no longer consolidated in HEI’s financials as of December 31, 2024, having been divested. This reduces diversification but simplifies the business model to focus on core utility operations.
• Common Stock Issuances and Equity Injections:
  • HEI issued \$575 million in new common stock in 2024, which significantly strengthened the equity base following the wildfire losses and ASB sale, but also resulted in substantial dilution to existing shareholders.
• Debt Maturity and Refinancing:
  • HEI’s long-term debt maturities are well-laddered, but the weighted average interest rate is relatively high (6.32% at year-end 2025), reflecting elevated credit risk.
  • The company repaid \$733.6 million in long-term debt in 2025, funded in part by a \$510 million new debt issuance.
• Dividend Suspension:
  • No dividends declared in 2024 and 2025, reflecting ongoing uncertainty and cash preservation in light of wildfire liabilities and capital needs. This could be a negative for income-focused investors.
• Operating Performance and Financial Ratios:
  • Return on average common equity for 2025 was 8.0%, up from a non-meaningful negative in 2024 (due to the loss) and 8.8% in 2023.
  • Market price to book value per common share has rebounded to 132% (from 113% in 2024 and 67% in 2023), indicating some restoration of market confidence but also possibly reflecting expectations of further risk resolution or recovery.

Operational and Regulatory Highlights

• Electric Utility Operations:
  • Hawaiian Electric’s revenues were \$3.07 billion in 2025, with net income of \$168.2 million, up from a \$1.23 billion loss in 2024. This reflects improved cost controls and lower extraordinary expenses.
  • Customer accounts were stable at 474,241. Kilowatt-hour sales grew 2.5% in 2025, with consolidated renewable generation at 37% of total (up from 36% in 2024), reflecting Hawaii’s ongoing energy transition.
  • Fuel oil costs declined by 12% year-on-year, but remain a significant portion of operating expenses.
  • The company’s rate base and authorized returns remained steady, but actual returns were distorted by wildfire liabilities. Book return on equity for Hawaiian Electric was 19.27% in 2025, but this is not considered meaningful due to the unique items in 2024/2025.
• Renewable Energy Transition:
  • Renewable Portfolio Standard (RPS) consolidated at 37% in 2025, with Hawaii Electric Light at 57%, Maui Electric at 42%, and Hawaiian Electric at 32%.
  • Customer-sited solar continues to grow, with 1,857 GWh generated in 2025, or 17.1% of total generation.

Other Noteworthy Items

• Workforce Reduction: Total employees decreased from 3,597 in 2023 to 2,659 in 2025, primarily due to the ASB sale and ongoing cost controls.
• Liquidity and Credit Facilities: HEI maintains substantial liquidity, but lower cash balances and higher leverage may continue to weigh on credit ratings and borrowing costs.
• Asset Sales: The company completed the sale of non-core generation assets (Hamakua, Mauo, Mahipapa, and Ka’ie’ie Waho), further focusing on regulated utility operations.

Potential Share Price Movers

• Resolution of Wildfire Liabilities: Any reduction in estimated liabilities or successful insurance recoveries could provide significant upside, while adverse litigation outcomes or regulatory penalties could negatively impact value.
• Dividend Policy: Resumption of dividends would be a major positive, but the current suspension reflects ongoing caution.
• Regulatory Changes: Any adjustments in allowed returns, rate base, or cost recovery mechanisms could materially affect future profitability.
• Execution on Clean Energy Transition: Continued progress towards RPS targets and cost-effective renewable integration may support long-term growth and investor confidence.

Conclusion

Hawaiian Electric Industries has taken decisive actions to stabilize its financial position following the devastating impact of wildfire claims in 2024. While the company has returned to profitability and strengthened its capital structure, substantial wildfire-related liabilities, the suspension of dividends, and a shrinking cash position present ongoing risks. Investors should remain attentive to potential litigation developments, regulatory responses, and the company’s progress in restoring dividends and rebuilding shareholder value.

Disclaimer: This article is a summary and analysis of Hawaiian Electric Industries, Inc.’s 2025 Statistical Supplement. It is intended for informational purposes only and does not constitute investment advice. Investors are advised to review the company’s full filings and consult their own advisors before making investment decisions.

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