Seshasayee Paper reports 21% jump in Q2

The company reported a net profit of Rs 6.87 crore (Rs 5.69 crore) on a turnover of Rs 245.60 crore (Rs 268 crore) for the quarter ended September 30, 2014. Production during the quarter was 45,289 tonnes (46,352 tonnes) while sales dropped to 39,498 tonnes (45,548 tonnes).

Seshasayee Paper and Boards (SPB) is the flagship company of the ESVIN Group. The headquarters of the group is at Chennai. The other companies belonging to the group are ESVIN Advanced Technologies, Ponni Sugars, High Energy Batteries and SPB - PC.

SPB operates an integrated pulp, paper and paperboard mill at Pallipalayam, Erode in Tamil Nadu, with an installed capacity of 1,15,000 tonnes per annum. An ISO 9001:2008 & ISO 14001 certified company, SPB also has the certifications from Forest Stewardship Council (FSC).

The company attributed the performance to improved profitability on lower finance costs due to repayment of loans and a reduction in depreciation provision following revision in rates under the new Companies Act, 2013. But, slow market conditions contributed to a drop in production and sales. Increasing costs of inputs, particularly wood, also added to the challenge.

Meanwhile, the listed company has informed the stock exchange that the board of directors at its meeting held on 1 November, 2014, has approved the implementation of Mill Development Plan (MDP-II) - Phase- I, at an estimated cost of Rs 150 crore, of which Rs 120 crore will be met by term loan from banks and the balance Rs 30 crore by internal accruals.