The groups operating profit before exceptionals was reported at £944 million, up 1.1%.
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Tesco chief executive Dave Lewis said the group had made “significant progress”.
Its return to the black comes after a grim year when massive property writedowns sent it slumping more than £6 billion into the red.
Latest annual results stripping out finance costs showed an operating profit of £1.05bn, up from a £5.75bn the year before.
It also said that its like-for-like sales performance in Ireland turned positive in the fourth quarter for the first time since 2012.
The supermarket posted a 0.9pc increase in United Kingdom like-for-like sales during its fourth quarter compared to a 1.5pc fall the previous quarter.
Since taking over, Mr Lewis has put Tesco’s focus on price cuts and putting more staff in stores in a bid to revive the company’s fortunes.
Looking forward the business said it is continuing to invest in its customer offering to ensure its competitiveness is improved especially in what is now a “challenging, deflationary market”.
Tesco may be the biggest supermarket in Britain but it is losing out to budget grocers Aldi and Lidl.
He also introduced a management shake-up whereby 25% of office-based roles were reduced, and 53 unprofitable stores were closed; plus he shelved plans to open a further 49 supermarkets.
It also sold its Singaporean online business Lazada to Alibaba for £90 million earlier this week and is exploring the sale of its Giraffe restaurant chain and Dobbies Garden Centre business.
It said this would be reflected in the improvement in the pace of improvement of profitability in the current year.
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They added that Mr Lewis “deserves considerable credit for steering this near retail shipwreck to calmer waters”.
