JK Paper Ltd today reported a 23.4 per cent increase in its profit after tax for the third quarter ended December 31, 2010 to Rs 25.11 crore.
The company, which posted gross sales of Rs 367.46 crore, up 18 per cent from the same period a year ago, said its board has approved a rights issue for Rs 250 crore, besides an interim dividend of 22.5 per cent for 2010-11.
"The proceeds from the rights issue will be used to part fund our project in Orissa," JK Paper Managing Director Harsh Pati Singhania told PTI.
The project is for setting up of a new pulp mill of 2,15,000 TPA and paper machine for manufacturing 1,65,000 TPA of high grade copier paper with a total an investment of Rs 1,650 crore, which was announced last year.
"We expect the plant to be operational by end of calendar year 2012 or early 2013," he said, adding the company has finalised the orders for most critical components on a fixed price basis and is in an advance stage of negotiations with investors and lenders to achieve financial closure.
On the interim dividend, Singhania said the growth in sales and operating profit during the preceding nine months and the outlook for the next three months have encouraged the directors to declare an interim dividend.
"This will entail an outgo of around Rs 17.5 crore without tax," he added.
Commenting on the overall performance during the third quarter this fiscal, Singhania said all the three paper segments -- copier, coated and packaging -- witnessed robust sales growth, although the company had faced raw material supply constraints due to flood in Andhra Pradesh.
"Also there was increase in input costs, specially in chemicals and there had to be price increase. In the nine months period this fiscal we have increased our product prices by an average of 8 per cent," he said.
On the outlook, he said demand looks good and the company is positive of registering another strong growth in this fiscal.
JK Paper scrips closed the day on the BSE at Rs 51 per share, down 3.13 per cent from the previous close.
