HEI drops unit;
takes charge
The parent of
By Rick Daysog
Hawaiian Electric will cut
its real estate business
Star-BulletinHawaiian Electric Industries Inc. today said that it expects to record a $23.5 million after-tax charge for the third quarter ending Sept. 30.
The company said the charge, which translates into 73 cents a share, reflects its decision to discontinue its residential real estate arm, Malama Pacific Corp., which has been hard hit by Hawaii's economic slump.
"We've now reached a point where it appears that a recovery in the real estate market may be several years off," said Robert Clarke, HEI chairman, president and chief executive officer.
"Under these circumstances we believe it is in the best interests of our shareholders to write-down our remaining real estate assets, discontinue our operations and redeploy our cash to our other lines of business."
The expected charge will take a bite out of the company's third quarter net income. Analysts surveyed by Zacks Investment Research had forecasted third earnings of 77 cents a share for HEI's continuing operations.
Malama, through its subsidiaries and various partnerships, has five residential projects on the islands of Oahu, Maui, and Hawaii. Malama has eight employees and will remain with HEI.
Malama's subsidiaries will wind-up its operations and plan for a disposition of its assets. Since the real estate group was formed in 1985, it has developed over 1,000 homes and lots for Hawaii's people.
Hawaiian Electric Industries is a diversified holding company. Its core businesses are electric utilities and a savings bank.
Other subsidiaries are involved in maritime freight transportation, and energy services projects in Asia and the Pacific.
