Electricity distributor Kenya Power posted a 35.6 per cent rise in half year net profit buoyed by rising demand and lower tax liability.

The firm’s net profit grew to Sh3.1 billion in the six months to December 2012 from Sh2.3 billion similar period the

previous year lifted by high electricity sales, which grew to Sh23.3 billion from Sh22.1 billion.

The company does not recommend payment of an interim dividend.

Kenya Power’s profit before tax grew at a slower pace of 5.05 per cent but a Sh642 million drop in tax liability lead to a faster growth in after tax profit.

The power distribution firm also benefitted from a Sh868 million increase in other income which include fibre optic lease charges, reconnection charges and miscellaneous sales.

However, an increase in financing costs driven mainly by the company's expensive overdraft positions quoted at Sh8.6 billion from commercial banks wiped the gains.

Kenya Power’s operating expenses dropped owing to increased uptake of hydropower which brought down the fuel cost to Sh16.7 billion from Sh23.9 billion.

Kenya Power share price in the Nairobi Securities Exchange Wednesday remained flat at Sh16.80 with 478,300 shares changing hands.