Yangtze Power, which oversees China's sprawling Three Gorges Dam project, posted strong quarterly earnings Friday and looked set to almost double 2004 income thanks to higher tariffs and strong demand.

Yangtze Power Co. Ltd., China's most valuable power utility, posted third-quarter net profit of 969.87 million yuan (US$117.2 million) as it raced to feed galloping power demand, but company executives declined to offer a comparison.

For the first nine months of 2004, it reported a net profit of 2.37 billion yuan, the company said in a statement.

Analysts said the hydro giant, impervious to sky-high coal, oil and gas costs, should see full-year earnings almost double.

Two analysts said 2004 profits should average 2.85 billion yuan.

Coal can account for half a power plant��s operating costs, analysts estimate.

Yangtze Power��s fate is more closely tied to water levels on the Yangtze, the world��s third-longest river, and the pace at which it brings additional capacity online.

Thus, its profit margin in the January-September period came in at 80 percent.

��Yangtze seems like it can do no wrong. It��s not hampered by costs of raw materials such as coal, while it receives strong support from a government keen to promote clean energy use,�� said Li Yuan, an analyst at Haitong Securities.

Analysts said Yangtze Power��s full-year prospects would be helped also by the onset of winter, which usually raises electricity demand for heating, and China��s structural power crunch.

China, the world��s top electricity market after the United States, is struggling to generate energy to feed a racing economy and has been forced to shut down plants and put emergency measures in place this year during an unusually hot summer.

Yangtze said in July it expected national power consumption to jump 12 percent to 2.1 billion megawatt-hours in 2004.

The dam operator is also expected to benefit from rising tariffs, with Bank of China International expecting its weighted average tariff to rise 8 percent this year after it began to dispatch electricity to wealthy Guangdong Province in February.

Source: Shenzhen Daily-Agencies