Iron ore producer Fortescue Metals Group has posted a record annual profit of $US4.7 billion ($A6.6 billion) and set a target of zero net emissions from its operations by 2040.

The group, which is the world’s fourth-biggest iron ore miner, said the 49 per cent lift in profit for 2019/20 was driven by record shipments and ongoing low costs that underpinned revenue of $US12.8 billion ($A17.9 billion).

Iron ore shipments rose six per cent to 178.2 million tonnes in the year, realising an average price of $US79 per dry metric tonne which 21 per cent higher.

“Once again, Fortescue’s unique differentiated culture underpinned the delivery of a year of outstanding performance,” CEO Elizabeth Gaines said in a statement on Monday.

Fortescue, led by chairman Andrew ‘Twiggy’ Forrest, also said it had revised its climate change target and now aims to achieve net zero emissions by 2040.

This includes a 26 per cent reduction in emissions from existing operations from 2020 levels by 2030.

Fortescue will pay a final dividend of $1 a share, taking the total payout for the year to $1.76.