Valhi net income jumps to $22.3M in Q2 on chemical strength

Valhi swung from a near-breakeven quarter to a $22.3 million profit in the three months through June, powered by a 13% revenue jump in its chemicals business. The Dallas-based conglomerate reported earnings of 78 cents a share for the second quarter, against 3 cents a year earlier. Revenue in its largest segment, chemicals – mostly the titanium dioxide (TiO2) business – rose $63.7 million to $558.1 million, the company said in an Aug. 6 release.

The chemicals unit posted operating income of $40.4 million, up from $10.3 million in the same 2025 period. Valhi credited higher sales volumes, lower raw material costs and the benefits of cost cuts made in late 2025 that the company described as permanent cost structure improvements. Average TiO2 selling prices increased 4% during the first six months of 2026, reversing declines from early 2025. The chemicals unit – one of the larger TiO2 producers globally under the TRONOX brand – has been announcing price increases and surcharges tied to higher operating costs throughout the second quarter.

Those tailwinds were partly offset by currency headwinds. Fluctuations in exchange rates, mostly the euro, reduced the chemicals segment's operating income by roughly $12 million in the quarter and $18 million for the first half, Valhi reported. That erosion connects directly to a tax charge. In the first half, Valhi recorded a $2 million income tax expense linked to a German tax audit for an uncertain tax position at the chemicals segment. Foreign-exchange swings made the European operations more expensive to run in dollar terms.

Valhi operates three reporting lines. The component products segment – security hardware and marine parts – added $8.9 million in operating income for the quarter, up from $6.3 million, driven by higher security sales into healthcare, transportation, tool storage and distributor markets. The real estate segment, a smaller piece of the group, reported a slower pace of development work as its residential community near Las Vegas nears completion. That segment booked a $5.8 million gain from selling an office building used in its own operations. It also recognized $16.7 million in tax increment infrastructure reimbursements for the half.

Corporate costs fell 2% in the quarter and 5% for the half, primarily due to lower environmental remediation spending. Interest expense rose $900,000 in the quarter and $2.4 million for the half, reflecting higher overall debt levels and higher average rates.

For the first six months, net income attributable to Valhi stockholders totalled $24.3 million, or 85 cents a share, against $17.8 million, or 62 cents a share, a year earlier. The company reports under three segments: chemicals, component products and real estate management and development.