Mining entrepreneur Andrew 'Twiggy' Forrest has pocketed a $445 million dividend cheque after his company Fortescue Metals Group posted a more than 100 per cent net profit jump on the back of stronger than expected iron ore prices.

Australia's third-largest iron ore producer released its full year figures to the market this morning and reported a net profit of $US2.1 billion ($2.6 billion) — up 112 per cent on last year.

The Perth-based company also reported a 19 per cent rise in revenue after shipping 170 million tonnes of iron ore for the year.

Fortescue Metals Group CEO Nev Power called the results "outstanding". ( ABC Rural: Eliza Wood )

Fortescue chief executive Nev Power said the strong results reflected higher iron ore prices and a relentless drive to lower production costs.

"The whole team has delivered these outstanding results against our key stretch targets of safety, production and cost," he said.

"Safety improved by 33 per cent compared to the previous year, while costs improved 17 per cent and we achieved a record low C1 operating cost of US$12.16/wmt in the June quarter."

FMG also reported cash on hand was $US1.8 billion with net debt reduced by 21 per cent to $US2.6 billion.

The firm will pay a final dividend of 25 cents a share, taking the full year pay out to 45 cents a share.

That equates to a full year dividend cheque of $445 million for FMG's founder and biggest shareholder Mr Forrest.

FMG back from the brink

Mining analyst Tim Treadgold said it was a remarkable turnaround for FMG, which had a near-death experience a few years ago when iron ore prices fell below $40 a tonne.

"It is a remarkable story," he said.

"But they are riding a higher iron ore price which is a bonus. They've also driven their costs down, so the combination is a very handsome profit, a much lower debt level and a very high dividend for shareholders."

FMG has dropped iron ore production costs to US$12.16/wmt. ( ABC News: Sue Lannin )

Mr Treadgold warned it would be almost impossible for FMG to lower its costs much more.

"It's hard to see them going any lower," he said.

"I mean they can't get down to zero for example, it will cost something to produce the iron ore.

"They have climbed their mountain and they are now enjoying the rewards that come with that.

"Their biggest challenge now is to earn more from the iron ore that they produce, which is not a high quality iron ore, so they have to get their costs down below their competitors because their product is not as high quality as BHP or Rio Tinto."