Ireland’s biggest residential landlord cut its dividend after underlying earnings declined in 2022 due to factors including higher financing costs.

Irish Residential Property Reit (Ires) told shareholders this morning the proposed additional dividend for the 2022 year is 2.81 cent per share, taking the total dividend for the year to 5.11 cent per share. The dividend is down versus a year earlier reflecting the impact of the one-off costs associated with the internalisation of the Reit’s management and higher financing costs.

The company’s underlying earnings fell 2.2pc despite an increase in rental income and other revenue from its nearly 4,000 properties.

A massive 21pc increase in financing costs on Ires’s borrowings and a fair value loss on its holdings pushed the company to an overall loss on the year of nearly €12m.

Chief executive Margaret Sweeney focused on strong underlying drivers of the business in her statement on the results.

“Despite the challenging macroeconomic backdrop, the financial and operational performance of the business was strong, demonstrating the resiliency of our business model and the commitment of our people,” she said.

“Our occupancy levels increased year-on-year to 99.4pc, supported by the robust market demand for our high-quality professionally managed apartments. We also continued to execute on our growth strategy, adding 238 homes with strong sustainability credentials in excellent locations.”

The stock was down slightly in morning trading.

Ires’s market capitalisation fell dramatically last year from €887m to €587m even though the net asset value of its holdings remained stable. It is trading at a 32pc discount, according to Goodbody, which rates the stock as a “buy” with price target 25pc above current levels.

“Ires Reit delivered an operationally strong FY22 results, in-line with expectations, but these results also show the start of the re-pricing of the Irish PRS sector as higher base rates and costs feed through (resulting in lower dividends),” said Goodbody analyst Colm Lauder in a note to clients.

Ires increased its loan to value ratio by 2.6pc to 43.3pc as base rates increased. The company said it had set up a new interest rate hedging arrangement and fixed 72pc of its debt via a revolving credit facility.