South Korea’s Samsung Engineering has reported a record quarterly operating loss, citing project difficulties in Saudi Arabia and the UAE in its third-quarter results announcement.

The company posted a loss of 1.48 trillion won ($1.3bn) in the third quarter of 2015 compared with a profit of 32.1bn won ($28m) in the same period last year.  

Revenues dropped to 857bn won in the third quarter, compared with 2.21 trillion won in the corresponding period of 2015.

The losses came from unforeseen costs and risks in Middle East projects. This included complex gas and oil facilities at the Shaybah field in Saudi Arabia, Reuters reported Samsung Engineering as saying. It cited a “lack of preparation and capability” for handling large, complex projects.

Samsung Engineering was awarded all four engineering, procurement and construction (EPC) packages for the Shaybah natural gas liquids (NGL) project in Saudi Arabia’s Empty Quarter in 2011. The contracts were worth a combined $3bn.

Samsung Engineering and other South Korean companies been highly successful in the Middle East EPC market over the last decade through aggressively-low bidding.

However, changing market conditions have eroded the margins for many ongoing projects.

Shares in Samsung Engineering slid over 15 per cent in early trading on 22 October after the results were announced.