The company posted a net profit after tax of $US319 million, only slightly lower than the $331 million recorded in the December 2014 half despite much lower iron ore prices.

Underlying earnings before interest, tax, depreciation and amortisation fell to $1.3 billion from $1.4 billion, while net cashflow from operating activities actually increased to $1.4 billion from $905 million.

Shaw and Partners analyst Peter O’Connor said it was likely to be the best non-gold company result in the mining sector this season.

The stellar result allowed FMG to maintain its interim dividend at A3c per share.

Importantly, the company shipped 84 million tonnes of iron ore and achieved a record low C1 cost of $US16/wmt for the half.

The company exited 2015 with a C1 cost of just $15/wmt – six months ahead of schedule – and as a result, has lowered its guidance by $2/wmt and plans to exit FY16 at $13/wmt.

By comparison, Rio Tinto reported C1 costs of $13.20/t for January, while BHP Billiton’s half-year costs were $15.21/t.

“Interestingly, this result should quell the sheer weight of negative tabloid headlines regarding FMG’s so called “marginal” producer status,” O’Connor said.

FMG CEO Nev Power said the company was positioning itself as the world's lowest-cost iron ore producer, but was firmly focused on its own business, rather than racing the majors.

"It's not an issue of trying to catch anyone," he said this morning.

During the half, FMG repaid $1.1 billion of debt, lowering net debt of $6.1 billion inclusive of its $2.3 billion cash balance.

Despite the result, shares in FMG dropped 1.9% to $A2.02 after a rally in price in recent days.