UPDATE 1-Fortress Paper Q4 profit up

* Q4 profit/shr C$0.27

* Q4 rev beats estimate

March 3 (Reuters) - Fortress Paper Ltd (FTP.TO) reported a higher fourth-quarter net profit, helped by increased capacity at its mills and a shift towards higher margin products particularly more non-woven wallpaper base in Dresden Mill, Germany.

The producer of security and specialty papers posted a net profit of C$2.8 million, or 27 Canadian cents a share, compared with C$2.3 million, or 22 Canadian cents a share, in the year-ago period.

The company's sales was C$46.3 million, compared with C$37.5 million in the prior period.

Analysts on average expected a profit of 29 Canadian cents cents a share, on revenue of C$44.4 million, according to Reuters Estimates.

"While the end of 2008 showed signs of weakening demand for our wallpaper products recently there has been a steady and marked improvement and our order book continues to strengthen," CEO Chad Wasilenkoff said in a statement.

Shares of the company were trading up 9 Canadian cents at C$5.09 on the Toronto Stock Exchange. (Reporting by Richa Dubey in Bangalore; Editing by Jarshad Kakkrakandy)