PERTH (miningweekly.com) – Iron-ore giant Fortescue has reported a record $1.7-billion net profit after tax for the half-year ended December, up some 259% from the $478-million reported in the previous corresponding period.

Revenue for the interim period was also up by 77% on the previous corresponding period, to $5.8-billion.

“The record results underline the continued success of Fortescue’s strategy to rapidly construct new capacity, ramp-up production and drive down costs,” said CEO Nev Power on Wednesday.

During the interim period, Fortescue shipped 53.9-million tonnes of product from its Pilbara operations, up 51% on the half-year ended December 2012, with realised average prices also increasing by 18% to $124/t.

The iron-ore miner not only increased its output, but also expanded its rail and port operations, improved product strategy and continued its focus on reducing cost, said Power, which assisted with the earnings before interest, tax, depreciation and amortisation increasing by 184%, to $3.2-billion.

C1 cash costs decreased by 34% to $33/t for the period, driven by the cost improvement initiatives and a lower Australian dollar.

“The ongoing strong demand for our products has allowed us to accelerate debt repayments, de-risk the balance sheet and increase returns to our shareholders,” Power added.

Since November, Fortescue committed $3.1-billion to debt repayments, and re-priced a term loan to garner a saving on interest of around $300-million a year.

“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 programme,” said CFO Stephen Pearce.

He noted that the combination of voluntary debt repayment and the term loan re-pricing provided significant benefit to the overall cost structure of the company, strengthening Fortescue’s balance sheet, increasing confidence in the outlook and the company’s ability to generate shareholder return.

For the full 2014, Fortescue expected to ship about 127-million tonnes of ore, subject to the full ramp-up of the ore processing facilities to full capacity. Delivery of the 155-million-tonne-a-year run-rate remained on target for the end of March this year, despite significant rainfall earlier this year.

The miner was also expected to spend some $2.1-billion on capital costs this financial year.