The dip in first-half revenues for Dubai-based property developer Emaar should not be a cause for concern, say analysts following the company’s half-year results.

Despite lower-than-expected results from the property arm of the business in the second quarter, steady revenue growth in Emaar’s malls, hospitality and retail business has reassured the market.  

“You would expect to see volatility in any real estate operation on a quarter-on-quarter basis. If we were to see a decline in the retail segment that would be more worrisome,” says Rehan Akbar, analyst at US rating agency Moody’s, based in Dubai.

The company reported revenues of AED5.063bn ($1.37bn) in the first six months of the year, a decline from AED5.219bn recorded in the same time period in 2013.

Shares in Emaar fell by 1.6 per cent closing at 9.99 dirhams on August 5, the day after the results announcement, suggesting the revenue decline had dampened investor confidence in the company.

Yet analysts were pleased with Emaar’s net profits in the first half, which rose by 41 per cent to reach AED1.731bn, compared with the AED1.231bn recorded in the first half of 2013.

Loic Pelichet, assistant vice-president of research at NBK Capital, says: “Overall, this is a good set of results, with recurring revenue-generating assets performing slightly ahead of estimates, and strong profitability.”

Revenue from Emaar’s malls, retail and hospitality units reached AED2.647bn, which represents 52 per cent of the total revenue for the first six months of the year.

The hospitality and leisure arm recorded revenues of AED893m during the first half of 2014, a 16 per cent increase on revenues compared with last year.

Emaar Malls Group, which developed Dubai Mall, reported revenues of AED1.25bn in the first half of 2014, a 13 per cent increase compared with the same time period in 2013.

The importance of the company’s malls, hotels and retail business has been steadily growing in recent years, providing a steady supply of recurring revenue, which was particularly important during the real estate downturn in the emirate.

Emaar is planning an initial public offering (IPO) of the malls business on Dubai’s main stock exchange, after winning regulatory approval in May to sell up to 25 per cent of its shares.