Weakened electricity demand in Guangdong and a tariff cut in Hong Kong dragged down the revenue of power producer CLP Holdings 14.5 per cent to HK$11.05 billion in the first three months of this year. The utility said yesterday electricity exports to the mainland slumped 47 per cent in the quarter from a year earlier, a result of the economic slowdown and dwindling manufacturing activity in the heavily industrialised province. Its mainstay electricity supply to customers in Kowloon, New Territories and Lantau was also hurt by a 3 per cent cut in the basic tariff, shaving revenue 16.1 per cent to HK$5.97 billion between January and March. Despite that, the quarterly dividend remained the same at 52 HK cents per share. Some analysts said the poor revenue heralded a sharp contraction in the utility's profitability, which had its return on average fixed assets cut to 9.99 per cent in October last year from 13.5-15 per cent previously as the new scheme of control became effective. The tariff cut was a key part of the new regulatory framework, which also governs the other electricity supplier in the city, Hongkong Electric Holdings. Hongkong Electric had its basic tariff lowered by 5.9 per cent on January 1. The new return means lower regulated earnings for the two firms, linked to the amount of spending on power assets. CLP said Hong Kong's recession dragged down electricity demand, with residential consumption 5.5 per cent lower and manufacturing consumption falling 18.6 per cent. However, the commercial sector consumed 4 per cent more electricity. CLP said good progress was made in discussions with mainland parties on gas purchase contracts to secure a fuel supply for its Black Point gas-fired power plant in Tuen Mun. The firm is pressing ahead with a plan to invest in a 24.5 per cent stake in a liquefied natural gas receiving terminal in Dachan, Shenzhen, in a joint venture with oil firm PetroChina and Shenzhen Gas. The company's stock jumped 90 HK cents or 1.75 per cent to finish at HK$52 at the close of trade yesterday after the utility major announced the results.