Hindalco Industries Ltd, an Aditya Birla Group company, on Friday announced that its net profit during the first quarter ended June 30, 2009, decreased 31% to Rs 480.56 crore owing to fall in commodity prices. Net sales for the quarter stood at Rs 3,899.49 crore, down 16.09% from Rs 4,647.53 crore in Q1 FY09.

“The steep reduction in aluminum and copper LME led to fall in the overall sales revenue and therefore, profitability. This was mitigated by the rupee depreciation against dollar and higher sales volume,” the company said in a statement.

Of total revenues of Rs 3899.49 crore, aluminium business contributed Rs 1421 crore, compared to Rs 1,943 crore in Q1FY09. Hindalco’s shares on Friday were up 6.65% to close at Rs 100.20 on the Bombay Stock Exchange. “The unprecedented 50% fall in LME over Q1FY09 levels dented the top line and the bottom line. This was partially offset from gains from weaker rupee, higher volumes and improved product /geographic mix,” Hindalco said. In the copper business, the company’s revenues increased by 12%, from Rs 2,213 crore in Q4FY09 to Rs 2,480 crore in Q1FY10, mainly on account of higher realization and better product and geographic mix, but were lower than Q1FY09 sales of Rs 2,706 crore.

Meanwhile, Hindalco has reached an agreement and received lenders’ consent on revised terms including covenant relaxations relating to $982 million bank loan.

“The new terms will allow the company significant flexibility to plan its future business and pursue its capital expenditure aspirations going forward,” it said.

Also, in view of the volatility in domestic market and developments in international markets, the company’s board on Friday decided that Hindalco could, in addition to offering of shares under the QIP route, which it had approved on June 30, 2009, issue share under the GDR or any other instrument or any combination thereof. But in any case, the total amount to be raised will be restricted to $500 million.

Hindalco said that in aluminium, the de-growth reduced to 17.7% this quarter against 21.3% in the previous quarter, with June alone lower by 13.8%.

“This may suggest that the slowdown is lifting off the trough,” the company said. Demands in developed markets have also shown signs of growth on quarter to quarter basis.