Fortescue Metals Group has nearly quadrupled half-year net profit on the back of soaring iron ore prices, allowing the miner to sharply boost shareholder payouts.

Fortescue, the world's fourth-biggest iron ore exporter, reported net profit $US1.22 billion ($A1.59 billion) for the six months to December 31, up from $US319 million a year ago.

Analysts had expected the company to report half year profit of around $US1.1 billion.

The price has continued to climb over the last two months, defying analyst expectations of a correction, and currently trades at $US95 a tonne.

Fortescue had used the downturn to align its cost structure with larger rivals BHP Billiton, Rio Tinto and Brazil's Vale and used the additional cashflow from the price rally to speed up its debt repayments.

"Our successful operational performance, combined with positive market conditions produced strong cash flows facilitating further debt repayments of US$1.7 billion," chief executive Nev Power said.

"Capital management remains our key priority and we will continue to repay debt, invest in the long term sustainability of our business and deliver returns to shareholders," he added.

Fortescue said its average cash costs for the half year were tracking ahead of target, at $US13.06 a tonne, while net debt was down to $US4 billion at the end of December.

The miner shipped 86 million tonnes during the six month period and says it is on track to deliver on its full year shipment guidance of 165-170 million tonnes.

The strong results helped the company lift its interim dividend to 20 cents a share, fully franked, compared to three cents a year earlier.

At 1250 AEDT, Fortescue shares were down two per cent at $7.025 a share, but are now worth three and a half times their value 12 months ago.