* Net income $59 mln versus year-ago loss of $107 mln
* Posts $2.5 bln revenue versus $2.6 bln year-ago
* Sees demand for flat rolled aluminum products for rest of decade
May 14 (Reuters) - Novelis Inc, the world's largest producer of rolled aluminum products, reported a quarterly profit on Tuesday, versus a year-earlier loss, boosted by stronger demand and better cost controls.
The company, a unit of India's HindalCo Industries Ltd , said it was able to push through unexpected headwinds in the second half of fiscal 2013, which ended March 31, and will continue to move ahead with numerous expansion projects.
"As expected, we saw a sequential recovery from our seasonally low third quarter ... driven by strong demand, good cost control and higher operating efficiencies," Chief Executive Phil Martens said in a statement.
Net income attributable to common shareholders was $59 million in the fiscal fourth quarter ended March 31, compared with a loss of $107 million a year earlier. Adjusted to remove one-time items, earnings for the quarter were $80 million, a $55 million increase over the previous year.
Revenue eased to $2.5 billion from $2.6 billion in the 2012 period.
Novelis saw solid demand in its key end markets globally and was able to better manage costs, partly due to increased use of scrap metal, Martens told Reuters in an interview.
For fiscal 2013, Novelis raised the average recycled aluminum content across its product offering by 4 percentage points to 43 percent, ending the year at 45 percent scrap.
Though he attributed the improved results to a combination of factors, Martens said, "Certainly our increase of recycled content has helped us. We saw a meaningful benefit from scrap, driven by better spreads and higher consumption in most of our regions."
The aluminum company's changing product mix, reducing those product offerings that require all-prime metal content, has helped it operate more efficiently and to lower costs.
"When we look at it strategically, it's doing exactly what we had hoped. It's providing us with a natural hedge against the LME (aluminum price). But it is also driving our business in a more cost-effective manner," Martens said.
Novelis has a goal of making products with an average of 80 percent recycled material by 2020. Once its new recycling capacity comes on line by the end of fiscal 2014, it will be able to increase the scrap content to the low 50 percent range.
For fiscal 2013, Novelis' shipments of aluminum rolled products slipped to 2,786 kilo tonnes from 2,838 kilo tonnes for the fiscal 2012 period, due mostly to the sale of its three foil plants in Europe and production disruptions in North America.
Martens said Novelis' capacity is currently fully booked, and he expects global demand to grow for the rest of the decade.
He looks for the flat-rolled products market to see demand grow by 32 percent globally over the next five years, with China still the strongest growth area. But he also looks for "meaningful growth in every region in the world driven by substitution, urbanization and sustainability."
The automotive segment will turn in "explosive growth," and Novelis plans to expand capacity to meet demand for auto sheet, a segment Martens projects to grow 25 percent globally on a compound annual basis.
Novelis' specialty aluminum business of electronics, architecture and transportation is seen growing globally at a 6 percent annual compound annual rate.
Cans should show solid demand growth of 4 to 5 percent globally compounded annually, from substitution in Europe and increased consumption in Asia and South America, he said.
To meet growing demand, Novelis allotted another $700 million to $750 million to add rolling capacity, finishing facilities and recycling plants in fiscal 2014. In fiscal 2013, its record capital investment came to $775 million.