The West

An FMG train carrying iron ore to Port Hedland in the Pilbara.
An FMG train carrying iron ore to Port Hedland in the Pilbara.

UPDATE 2.20pm: Fortescue Metals Group has posted a 56 per cent jump in full-year profit as it ramped up shipments from its Pilbara iron ore mines to 124.2 million tonnes, a 54 per cent jump on the previous year.

The bottom line profit was $US2.73 billion, up from $US1.75 billion the previous year.

The result was achieved on a 45 per cent surge in revenue to $US8.1 billion.

The company will pay a final dividend of 10 cents a share fully-franked, bringing its full-year dividend to 20 cents a share after it paid an interim dividend of 10 cents earlier in the year.

The full-year dividend represents a payout ratio of 21 per cent, however FMG said it would look to boost that to 30-40 per cent when targeted gearing levels of 40 per cent were achieved.

Chief executive Nev Power said Fortescue's record net profit reflected an outstanding performance across all areas of operations.

"The accelerated ramp up to 155 million tonnes per annum in March and the sharp reduction in costs over (the year) are a tribute to everyone at Fortescue," he said.

"We remain steadfast in our commitment to debt reduction, with another $US500 million to be repaid in October, taking repayments to $US3.6 billion in less than a year and moving us closer to our gearing target of 40 per cent."

FMG noted C1 costs had decreased by 23 per cent to $US34 per wet metric tonne, with total delivered costs, inclusive of shipping, royalties and administration of $US52 per wet metric tonne or $US56 a tonne on a dry basis.

The miner held cash of $US2.4 billion and net debt of $US7.2 billion at the end of the period, which it said reflected the continued strength of operational cashflows, reduced capital expenditure and lower finance costs.

It achieved an average price of $US106 a tonne for its ore in 2014 compared with $US114 in the previous year.

The company also announced today a continuance of its debt repayment strategy with the repayment of $US500 million of senior unsecured notes.

FMG chief financial officer Stephen Pearce said the company would continue to assess all possible opportunities to take advantage of the company's flexible debt/capital structure and improving credit metrics to strengthen the balance sheet.

"This includes further repayments and re-financing well in advance of maturities," he said.

Fortescue shares closed down seven cents, or 1.52 per cent, at $4.55.

The West Australian

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