CLP Holdings, Hong Kong's biggest power supplier, said revenue in the first nine months of this year climbed 6.9 percent as gains in commercial sales helped offset a drop in residential power demand.

Revenue in the period reached HK$42.7 billion, compared with HK$39.9 billion a year earlier, CLP said in a statement to the Hong Kong stock exchange yesterday.

Local sales of electricity declined by 0.4 percent in the first nine months of this year.

"Rainy weather in July and August had an adverse effect on local electricity sales," the company said. Residential sales fell 0.4 percent and commercial sales rose 1.3 percent in the two-month period.

Sales in the manufacturing sector fell 9.2 percent, reflecting closures in the textiles and electronics industries, CLP said. Mainland power sales decreased by 13.1 percent, to 2.8 billion kwh. That brought the total sales, including sales to the mainland, down by 1.9 percent to 25,787 gwh over the same period in 2007.

The company said that the government approved the development plan of CLP Power Hong Kong and Castle Peak Power Company in September - the capital expenditure of which was about HK$39.9 billion.

To secure its liquefied natural gas (LNG) supply by 2013, the company is working with mainland parties on three replacement gas supply sources, such as pipeline gas supplied from the South China Sea, the feasibility of a supply via the second West-East natural gas pipeline and the joint development of an LNG terminal on the mainland.

The two tariff increases this year will recover only about 35 percent of the increase in coal costs this year, the power producer said. The mainland, which controls electricity prices to limit the impact on inflation, raised power tariffs by 4.7 percent in July and 6 percent in August to help generators cope with rising fuel costs.

The company has entered into an agreement to explore the development of an Indonesian mine to take greater control of coal costs, CLP said yesterday, without elaborating.

The company will pay an interim dividend of HK$1.56 a share, unchanged from a year earlier.

Shares of CLP yesterday closed down 1.96 percent, or HK$1.10, to HK$54.90.

Bloomberg contributed the story

(HK Edition 10/22/2008 page2)