February 06, 2025 [Reuters]- SK Innovation Co Ltd, owner of South Korea’s top refiner SK Energy, said it expects refining margins to remain flat in 2025 due to rising jet fuel demand, despite production increases expected in countries such as the U.S. and Canada.

The company, which is also parent of battery maker SK On, said on Thursday that U.S. Trump administration’s policies such as toward the Inflation Reduction Act (IRA), as well as reduced green policies in the European Union and automakers recalibrating their electric vehicle businesses are expected to delay the recovery in short-term EV demand.

“Our company’s view is… rather than completely scrapping the IRA, it will be partially scaled back or adjusted,” SK On executive Jun Hyun-wook said in an earnings call.

“But the U.S. administration’s policy changes goes beyond IRA subsidies and needs to be considered from multiple angles including tariffs and policy toward China. We will fully utilise our U.S. government relations capabilities by working with (SK) group.”

However, for SK’s energy business, U.S. tariffs on Canadian and Mexican oil may mean some of the oil will be supplied to Asia, as the U.S. cannot afford to completely replace oil from these two countries, the company said in the call.

SK Innovation said its 2025 capital expenditure is expected to be around 6 trillion won ($4.14 billion), out of which 3.5 trillion won will be for its battery business.

The company posted an operating profit of 159.9 billion won for the October-December period, up from 72.6 billion won a year earlier.

Revenue in the fourth quarter fell 0.6% to 19.4 trillion won.

Shares in SK Innovation were trading down 2.9% in early trade, compared to the benchmark KOSPI’s 0.7% rise.

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