The company posted a net profit after tax of close to US$2.1 billion, up by 112% but in line with expectations.
Revenue rose by 19% to $8.44 billion, based on an average realised price of $53 per dry metric tonne.
Underlying earnings before interest, tax, depreciation and amortisation rose by 48% to $4.7 billion, while net cashflow from operations jumped by 74% to $4.25 billion.
FMG declared a final fully franked dividend of A25c per share, bettering UBS’s prediction of 15c per share and RBC Capital Market’s estimate of 18c per share.
The payout takes the total FY17 dividend to 45c per share, fully franked.
The company has increased its dividend payout ratio guidance to 50-80% of net profit after tax.
It compares to 52% for FY17 and 36% for FY16.
The company closed the financial year with US$1.8 billion cash and net gearing of 21% after making $2.7 billion in debt repayments.
“Fortescue has continued to generate excellent cashflows allowing further repayment of debt, strengthening of our balance sheet and increasing returns to our shareholders,” CEO Nev Power said.
“Safety improved by 33% compared to the previous year, while costs improved by 17% and we achieved a record low C1 operating cost of US$12.16/wmt in the June quarter.”
Total delivered costs dropped by 4% to $22/wmt.
Guidance for FY18 is shipments of 170 million tonnes at C1 costs of $11-12/wmt, based on a 75c exchange rate and oil price of $53 a barrel.
After a price realisation of 77% in FY17, FMG has set guidance at 75-80% and believes discounts to the 62% Platts price will narrow in the second half of the year.
Price realisation was around 73% in the June quarter, resulting in an average price of just $37.82/dmt.
Shares in FMG jumped by 6% to A$5.83 after the iron ore spot price jumped to nearly US$78/t on Friday night.