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Irish Residential Properties REIT PLC on Thursday said it delivered ‘strong’ growth in the first half year despite making an €42 million loss, and has agreed to sell 194 assets for over €70 million.
The Dublin-based private rental accommodation provider reported a pretax loss of €42.1 million for the first half of 2023, compared with an €22.9 million profit the prior year. Its basic loss per share was 8.3 cents, down from earnings of 4.3 cents per share.
Chief Executive Margaret Sweeney said the loss was mainly due to an €56.5 million non-cash re-evaluation of I-Res’s total portfolio value, ‘which reflects an increase in yields and weakening in values across the real estate sector, which is attributable to the higher interest rate and inflationary environment.’
I-Res said revenue from investment properties meanwhile increased 5.2%, to €44.3 million from €42.1 million. Net rental income increased 5.1% to €34.3 million from €32.6 million, while adjusted earnings before interest, tax, depreciation and amortisation increased 6.9% to €28.7 million from €26.8 million.
‘I-Res delivered another strong operational and financial performance for the first half of the year,’ said Sweeney. ‘This reporting period has demonstrated the benefits of a new internalised platform, with the company delivering cost reduction initiatives and operating efficiencies.’
Also on Thursday, I-Res said it has entered a contract to sell 194 residential units in West Dublin to the Tuath Housing Association, for a total consideration of about €72.1 million. This is part of its €100 million asset disposal programme announced in mid-April, of which I-Res has so far delivered on approximately €96.5 million.
I-Res said the disposal ‘represents an attractive return on the original acquisition cost,’ and that it will use the proceeds to retire its higher cost debt and thereby strengthen its balance sheet.
Despite the aforementioned €42.1 million loss, I-Res proposed to increase its interim dividend by 6.5%, to 2.45 cents per share from 2.30 cents last year.
I-Res Chair Declan Moyen said its outlook ‘remains positive’ since ‘the private rental sector exhibits remarkable resilience and demand for professionally managed homes continues to far outstrip supply...This should also continue to underpin our revenue growth and resilient portfolio valuations going forward.’
Sweeney added: ‘While uncertain conditions may persist, our performance illustrates the resilience of our high-quality assets and efficient operating model. By maintaining our focus on performance, prudent financial management and operational excellence, I am confident in our ability to continue generating attractive long-term returns for shareholders.’
Irish Residential shares were up 3.1% at €0.91 in Frankfurt on Thursday.
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