The company on Monday announced it would triple its full year dividend to 45 cents per share (Australian dollars) compared to last year and that it would adopt a more generous payout policy in the future.

The news came on the back of the miner revealing its net profit after tax had soared 112 per cent, to $US2.1 billion ($2.7 billion) for the year, its second highest mark on record.

Fortescue will pay a fully franked final dividend of 25 cents a share, payable on 3 October, and, under Fortescue's new dividend policy dividend, has promised payouts will be between 50-80 per cent of net profit after tax in the future.

Questioned about the sustainability of the new dividend approach in a media call after the results, Fortescue chief executive Nev Power said "it is absolutely sustainable".

"We are committed to be a company that provides strong returns to shareholders. I think for all too long, we've seen huge volatility in returns from a lot of companies in the resource sector, and we want to make sure that we're building a foundation that provides for solid returns to shareholders going forward," he said.

"That range of 50-80 per cent recognises the fact that we have volatility in earnings through iron ore price, and we'll reflect that outlook for iron ore price in the actual dividends that we pay for each six month period.

"So translating that, if we have very strong iron ore price and strong cash earnings then we'll pay at the upper end of the range, if we do go through periods of lower iron ore price we'll pay out at the lower end of the range. But certainly that range is sustainable."

Back in 2014-15 Fortescue paid a full year dividend of just 5 cents a share.

The first miner to report in a busy week of earnings season, Fortescue said its result reflected higher prices for iron ore and a sustained focus on productivity and efficiency initiatives.

Iron ore production, with 170.4 million tonnes shipped for the year, was up slightly to a new record. Average operating costs meanwhile, fell 17 per cent to a new company record.

Fortescue shares rose 35 cents, or 6.36 per cent, to close at $5.85.

Fortescue reported underlying earnings before interest, tax, depreciation and amortisation (underlying EBITDA) of $US4.74 billion, up 48 per cent on the previous year. Revenue rose 19 per cent to $US8.48 billion at the same time as net debt fell by $US2.56 billion, to $US2.63 billion.

Other highlights from the results included a 17 per cent reduction in "C1 operating costs" to an average of $US12.82 per wet metric tonne. C1 costs are the costs of mining, processing, rail and port operations and other related costs.

"The continued focus on productivity and efficiency has reduced our C1 costs to record levels, ensuring we maintain our position at the lowest end of the global cost curve. Our strong operating performance is continuing to generate excellent cash flows, allowing further repayment of debt, strengthening our balance sheet and increasing returns to our shareholders," Mr Power said.

???Mr Power said fiscal 2017 had been "a record-breaking year" for Fortescue.

Asked about the outlook for demand from China for iron ore in fiscal 2018, he forecast "another year of consistent demand from China".

In a note to clients Citi analyst Clarke Wilkins said the lift in the payout ratio was a "key positive" with the forward guidance a signal of "increased confidence in the balance sheet".

Citi upped its recommendation on the stock to neutral from sell.

Mr Wilkins later told Fairfax Media that Fortescue had recorded a good result.

"The cost performance has been exemplary, second to none," he said.

The $US2.1 billion net profit was slightly below consensus, but Peter O'Connor from Shaw and Partners said Fortescue had also recorded a "nice dividend beat" of about 22 per cent.

In the call with analysts Mr O'Connor described Fortescue's fiscal 2017 outcome as "a cracker result".