SEOUL, Aug 1 (Reuters) - SK Innovation said

on Thursday it expects strong oil refining margins in the second

half of the year as OPEC+ production cuts buoy prices and the

peak demand season for transportation, cooling and industrial

use begins.

The owner of South Korea's biggest refiner, SK Energy,

posted an operating loss of 46 billion won ($33.6 million) for

April-June versus a 107 billion won loss a year earlier. The

result compared with an LSEG SmartEstimate of 295 billion won

profit.

Revenue rose 0.4% to 18.8 trillion won, just missing analyst

estimates.

Battery subsidiary SK On, a supplier of automakers including

Ford Motor ( F ), Hyundai Motor ( HYMTF ) and Volkswagen

, booked a wider operating loss of 460 billion won

versus a loss of 332 billion won in the previous quarter.

SK On reiterated its target of breaking even in the fourth

quarter, citing a demand recovery in electric vehicles and

batteries in general as well as cost reduction initiatives.

Parent SK Innovation is merging with energy affiliate SK

E&S, which analysts said will likely shore up the finances of

the money-losing battery subsidiary by combining it with a

profitable company with a stronger balance sheet.

SK Innovation's share price was 0.9% higher in morning trade

versus a 0.2% rise in the benchmark KOSPI.

($1 = 1,369.0500 won)