The new results saw large increases across the board for the company, with revenue up 77% to $5.8 billion, and earnings before interest, tax, depreciation and amortisation up 184% to $3.2 billion.

Total shipments rose 51% to 53.9 million tonnes, while C1 costs dropped 34% to $33/t, driven by cost improvements, higher volumes, and a lower Australian dollar.

"This record result underlines the continued success of Fortescue's strategy to rapidly construct new capacity, ramp up production and drive down costs," FMG CEO Nev Power said.

"The ongoing strong demand for our products has allowed us to accelerate debt repayment, de-risk the balance sheet and increase returns to our shareholders."

The half saw first ore delivered from the Kings project in November, with operations scheduled to ramp up to the 155Mtpa rate by the end of March.

The company also started reducing its debt, with the early voluntary redemption of $A140 million in preference shares and $US1 billion senior unsecured notes.

In January a further $1.6 billion repayment of senior unsecured notes was announced, and the company took control of the Christmas Creek processing facilities due to safety concerns.

The company's net debt position at the end of December was $8.6 billion, with cash on hand of $2.9 billion.

Looking forward the company said total FY2014 shipments were estimated to be 127Mt, sensitive to weather and the ramp up of processing facilities to full capacity.

Delivery of the 155Mtpa run rate remains on target for the end of March despite significant rainfall this year, which has impacted all operations.

In terms of future demand, Power told a media briefing this morning that prices would continue to be volatile, but the iron ore fundamentals remained firm and FMG continued to see good demand.

"We'll inevitably see volatility with the destocking and restocking cycles. We shouldn't expect a flat price, but rather the long term prices will trade within the $110-120 range," he said.

Power also said safety reviews were still underway following two fatalities and a serious injury at its operations late last year.

"We're very proud of the culture we have at FMG and safety will continue to be the major focus," he said.

"We need to now make sure we have that consistency stand right across the business and that it is very clear to all employees, particularly our contractor employees."



In other parts of the business, C1 costs for the full financial year are estimated at $34/t, and capital expenditure is expected to be $2.1 billion, significantly lower than the $6.2 billion spent in FY2013.

"Strong operational cash flows and the completion of capital projects have provided the free cash flow which has enabled the acceleration of our debt reduction program," FMG chief financial officer Stephen Pearce said.

"It is a great feeling to be able to return cash to our debt holders and reward our shareholders.

"The combination of voluntary debt repayments and term loan re-pricing provide significant benefits to the overall cost structure, strengthening our balance sheet, increasing confidence in the outlook and our ability to generate shareholder returns."

Fortescue shares were down 1.3% to $A5.90 this morning.