MELBOURNE (Reuters) -Australia's Fortescue reported its smallest full-year profit in six years, in line with analyst estimates, on Tuesday and lowered its dividend payout while reaffirming its commitment to its green division after refocusing its growth strategy.

The world's fourth-largest iron ore miner logged its lowest profit and dividend since before the COVID-19 pandemic, in line with its rivals, as prices of the key steel-making ingredient fell and as the industry holds on to cash for growth.

Fortescue has pivoted away from some of its most ambitious green hydrogen plans as it looks to quell investor concerns about overspending and has refocused on its core iron ore business. The miner's shares fell 2.1%.

A trial production plant for "green iron", using hydrogen instead of coal to initially produce 1,500 tonnes to meet demand from its China-based steel customers, will now start from 2026 rather than an earlier forecast of this year.

"The vision is quite clear," said Dino Otranto, the metals division CEO. "You've got a customer who wants a greener product. In Australia we're blessed with a lot of iron ore and we are blessed with a lot of free sun and wind."

Fortescue's iron ore exports include as much as 40% of waste that could be eliminated by shipping green iron instead, Otranto said.

"As soon as you turn that (iron ore) into green metal you unconstrain your shipping and logistics facilities," he said. "That's the long term vision." Otranto added that common power infrastructure investment needed to be a priority to lower power costs.

"We are seeing aggressive moves by Saudi Arabia to get into this space. I think we have a unique opportunity now to get into it and that could pass us by," he added.

Rio Tinto and BHP have both played down Australia's prospects of developing a "green iron" sector that would help decarbonise the steel industry, saying the country lacks the economic incentives to do so.

DIVIDEND PAYOUTS

Fortescue said attributable net profit after tax came in at $3.37 billion for the year ended June 30, down from $5.68 billion a year ago. That compares with the average analysts' estimate of $3.43 billion, according to data compiled by LSEG.

Fortescue has pushed hard into green hydrogen in recent years. But last month it called time on two projects in Arizona and Australia citing a customer base that was under developed.

Its new CEO of green energy and growth Gus Pichot, however, reaffirmed Fortescue's commitment to green energy and green hydrogen in particular.

The Perth-based miner declared a final dividend of A$0.60 per share, bringing its full-year dividend to A$1.10 apiece.

Its dividend payout ratio, at 65% of profits, matched fiscal year 2023, which was the lowest payout since 2018.