■ Full-year 2025 results: Revenue of KRW 80.30 trillion; Operating profit of KRW 448.1 billion
■ One-off pre-tax loss due to asset impairment, including BlueOval SK restructuring; No impact on cash flow
■ Continued portfolio realignment and financial stabilization to accelerate electrification strategy
SK Innovation today announced its financial results for the fourth quarter (Q4) and full year of 2025. The company posted Q4 revenue of KRW 19.67 trillion and operating profit of KRW 294.7 billion. For the full year, SK Innovation achieved revenue of KRW 80.30 trillion and operating profit of KRW 448.1 billion.
Despite robust refining margins and strong performance in the lubricants business, Q4 operating profit declined by KRW 291.0 billion quarter-on-quarter (QoQ), primarily due to seasonal factors in the E&S business and lower profitability in the battery division.
In Q4 last year, SK Innovation recorded a non-operating loss of KRW 4.66 trillion, a significant increase from the previous quarter, primarily due to asset impairment charges related to the battery business. As a result, the company posted a pre-tax loss of KRW 4.36 trillion for Q4 and KRW 5.82 trillion for the full year. This was largely attributable to SK On’s recognition of approximately KRW 4.2 trillion in asset impairments, including those related to the restructuring of the BlueOval SK joint venture with Ford Motor Company.
SK Innovation stated, “This impairment recognition is a one-time adjustment to reflect the current value of assets in accordance with accounting standards, and does not have a direct impact on cash flow.” “As Ford is expected to acquire the assets and liabilities of the Kentucky plant in the first quarter, our financial structure is expected to improve compared to year-end.”
Strategic Realignment and Strengthening the Battery Business
As a highlight of Q4, SK Innovation strengthened the fundamentals of its battery business through the restructuring of joint ventures in the U.S. and China. This included a share swap between SK On Jiangsu (SKOJ) and Huizhou EVE United Energy (EUE), as well as the termination of the BlueOval SK partnership. The company also enhanced business competitiveness and financial stability through portfolio rebalancing measures, such as the merger of SK On and SK Enmove and the divestment of non-core assets.
SK Innovation also reported the successful first LNG cargo shipment from the Caldita-Barossa (CB) gas field in Australia, in which it holds a 37.5% stake, laying a stronger foundation for its LNG value chain.
Looking ahead, SK Innovation will continue to focus on enhancing profitability across its refining, chemical, and LNG value chains, while also strengthening the long-term competitiveness and financial health of its battery business through ongoing portfolio optimization and asset monetization. The company remains committed to its “Electrification” strategy, aiming to build a complete energy value chain and expand global LNG infrastructure as it transforms into a leading “Total Energy Company.”
Q4 2025 Performance by Business Segment
- Refining business: Revenue KRW 11.71 trillion; Operating Profit KRW 474.9 billion
Improved refining margins was supported by lower official selling price OSP and favorable market conditions. Seasonal demand and supply disruptions in Russia led to strong diesel and kerosene spreads, increasing operating profit by KRW 170.7 billion QoQ. - Petrochemical business: Revenue KRW 2.12 trillion; Operating Loss KRW 8.9 billion
The chemicals business saw its losses narrow, supported by the start-up of new high-purity terephthalic acid (PTA) facilities and strong demand in downstream industries, which contributed to improved paraxylene (PX) market conditions. - Lubricants business: Revenue KRW 989.6 billion; Operating Profit KRW 181 billion
Despite seasonal low demand, the business segment achieved higher operating profit QoQ, driven by improved margins from lower oil prices and increased sales volume through the optimization of production and sales of high-end Group III base oil products. - Exploration & Production (E&P) business: Revenue KRW 322.7 billion; Operating Profit KRW 81.0 billion
Lower oil prices and sales volumes resulted in a slight decrease in profitability. - Battery business: Revenue KRW 1.46 trillion; Operating Loss KRW 441.4 billion
Despite increased sales volume in Europe, battery business revenue declined, and operating losses widened due to reduced sales following the discontinuation of U.S. EV purchase subsidies. Lower utilization rates, driven by inventory adjustments from North American customers and year-end shutdowns at automotive plants, also contributed to the increased losses. In addition, a reduction in the benefits from the Advanced Manufacturing Production Credit (AMPC) further impacted profitability. The benefit from the AMPC under the U.S. Inflation Reduction Act (IRA) amounted to KRW 101.3 billion. - Materials business: Revenue KRW 17.2 billion; Operating Loss KRW 75.2 billion
The segment reported ongoing losses, mainly due to decreased sales to North America following the end of U.S. EV subsidies, as well as year-end inventory adjustments. - SK Innovation E&S: Revenue KRW 3.04 trillion; Operating Profit KRW 117.6 billion
Operating profit declined by KRW 137.8 billion QoQ mainly due to lower oil prices, decreased power demand during the shoulder season leading to a drop in system marginal price (SMP), and scheduled maintenance for stable winter operations.
2025 Full-Year Results
For 2025, SK Innovation’s business segments delivered the following results:
- Refining: Revenue KRW 47.19 trillion; Operating Profit KRW 349.1 billion
- Petrochemical: Revenue KRW 8.92 trillion; Operating Loss KRW 236.5 billion
- Lubricants: Revenue KRW 3.84 trillion; Operating Profit KRW 607.6 billion
- E&P: Revenue KRW 1.37 trillion; Operating Profit KRW 399.7 billion
- Battery: Revenue KRW 6.98 trillion; Operating Loss KRW 931.9 billion
- Materials: Revenue KRW 84.0 billion; Operating Loss KRW 233.8 billion
- SK Innovation E&S: Revenue KRW 11.86 trillion; Operating Profit KRW 681.1 billion
2026 Outlook
SK Innovation expects refining margins to remain stable ahead of the U.S. midterm elections, despite lower winter demand and potential Russia-Ukraine ceasefire developments.
As for the petrochemical business, paraxylene (PX) spreads are expected to improve due to reduced supply from regional maintenance, while olefins and polymers are likely to maintain current spreads despite new capacity additions, supported by lower naphtha prices.
The lubricants business will focus on stable profitability, leveraging SK Enmove’s Group III market leadership amid a challenging global environment.
E&P will continue to expand production in China and Vietnam. In China’s 17/03 block, two additional production wells were completed in Q4 last year. In Vietnam, further gas production is planned at the 15-1 block through additional drilling, and production at the 15-1/05 development block is scheduled to commence in Q4 this year. At the 15-2/17 exploration block, following a successful first appraisal well, two more appraisal wells are scheduled for completion within the year. In Malaysia’s SK427 exploration block, drilling of the first exploration well is underway, with a second well to follow.
The battery business will prioritize sustainable growth and financial soundness through portfolio optimization, with a strategic focus on energy storage systems (ESS) and a goal of securing 20GWh in global project orders in 2026.
Materials business will work to diversify its customer and product portfolios and improve cost structures.
SK Innovation E&S expects continued profitability through cost-competitive LNG sourcing and stable supply from Indonesia’s Tangguh and Australia’s CB fields, despite a weaker SMP.
Shareholder Policy
To strengthen its financial position and secure future growth, SK Innovation’s Board of Directors decided on January 27 to suspend dividends for the 2025 fiscal year. This measure is aimed at preserving cash, accelerating recovery of financial health, and delivering greater long-term value to shareholders.
Seo Kun-ki, Head of SK Innovation’s Finance Division (CFO), stated, “In 2026, we are committed to strengthening our core competitiveness, maintaining financial stability, and advancing our electrification strategy. We expect 2026 to be a pivotal year for SK Innovation, as we pursue both financial resilience and sustainable growth, taking a significant step forward as a global energy leader.”
[Attached]
1. SK Innovaion quarterly earnings (based on K-IFRS) (Unit: KRW hundred million)
| Q4 2024 | Q3 2025 | Q4 2025 | YoY | QoQ | |
|---|---|---|---|---|---|
| Revenue | 193,022 | 204,188 | 196,713 | +3,691 | -7,475 |
| Operating profit | 1,759 | 5,857 | 2,947 | +1,188 | -2,910 |
2. 2025 full year results (based on K-IFRS) (Unit: KRW hundred million)
| Refining* | Petrochem* | Lubricants | E&P | Battery | Materials** | E&S | Others | Total | |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 471,903 | 89,203 | 38,361 | 13,675 | 69,782 | 840 | 118,631 | 566 | 802,961 |
| Operating profit | 3,491 | -2,365 | 6,076 | 3,997 | -9,319 | -2,338 | 6,811 | -1,872 | 4,481 |
(**) Materials: Based on consolidated financial statements of SK Innovation, which removed internal transactions of SK Innovation affiliates
