The Chemicals Segment’s operating loss in the first six months of 2023 includes an insurance settlement gain related to a 2020 business interruption insurance claim of $2.2 million ($1.1 million, or $.04 per share, net of tax and noncontrolling interest).
The Component Products Segment’s net sales were $35.9 million in the second quarter of 2024 compared to $36.6 million in the second quarter of 2023 and $73.9 million in the first six months of 2024 compared to $77.8 million in the same period of 2023. The Component Products Segment’s second quarter and year-to-date 2024 net sales decreased over the comparable 2023 periods due to lower marine components sales primarily to the towboat market, partially offset by higher security products sales primarily to the government security market. Operating income attributable to the Component Products Segment was $5.1 million in the second quarter of 2024 compared to $4.4 million in the second quarter of 2023 and $8.8 million in the first six months of 2024 compared to $11.4 million for the same prior year period. The Component Products Segment’s operating income increased in the second quarter of 2024 compared to the same period in 2023 due to the effects of higher security products sales and gross margin which more than offset lower marine components sales and gross margin. The Component Products Segment’s operating income decreased for the first six months of 2024 compared to the same period in 2023 due to lower marine components sales and gross margin partially offset by higher security products sales and higher security products gross margin in the second quarter of 2024 compared to the second quarter of 2023.
The Real Estate Management and Development Segment had sales of $23.3 million in the second quarter of 2024 compared to $27.3 million in the second quarter of 2023. For the first six months of 2024 the Real Estate Management and Development Segment had sales of $37.1 million compared to sales of $52.5 million in the same period of 2023. Land sales revenue is generally recognized over time based on cost inputs, and land sales revenues are dependent on spending for development activities. Substantially all of the land sales revenues recognized in 2024 are related to land sold in prior years. Land sales revenues in the second quarter and first six months of 2024 decreased compared to the same periods in 2023 due to the decreased pace of development activity for previously sold parcels within the residential/planned community, primarily due to delays in obtaining city permits. The pace of development activities is dictated by a number of factors such as city permit and design approval and labor and materials availability.
Corporate expenses were 9% higher in the second quarter of 2024 and 4% higher in the first six months of 2024 compared to the same periods of 2023. Corporate expenses increased in both periods primarily due to higher environmental remediation and related costs in 2024 compared to 2023. Interest income and other increased $.8 million in the second quarter of 2024 and $1.6 million in the first six months of 2024 compared to the same periods of 2023 primarily due to higher average interest rates. Interest expense increased $4.7 million and $9.0 million in the second quarter and first six months of 2024 compared to the respective periods in 2023 primarily due to higher interest rates as a result of the Chemicals Segment’s debt refinancing in February 2024. In addition, interest expense for the first six months of 2024 includes a charge of $1.5 million ($.7 million, or $.03 per share, net of tax and noncontrolling interest) for the write-off of deferred financing costs at the Chemicals Segment.
The net loss attributable to Valhi stockholders for the second quarter and the first six months of 2023 includes a non-cash loss of $6.2 million ($3.8 million, or $.13 per share, net of income taxes and noncontrolling interest) related to the termination of our United Kingdom pension plan and a gain of $1.5 million ($1.1 million, or $.04 per share, net of income taxes and noncontrolling interest) on the sale of land not used in operations.
The statements in this press release relating to matters that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Although we believe the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those predicted. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause our actual future results to differ materially include, but are not limited to, the following:
| ● | Future supply and demand for our products; |
| ● | Our ability to realize expected cost savings from strategic and operational initiatives; |
| ● | Our ability to integrate acquisitions, including Louisiana Pigment Company, L.P. (LPC) into Kronos’ operations and realize expected synergies and innovations; |
| ● | The extent of the dependence of certain of our businesses on certain market sectors; |
| ● | The cyclicality of certain of our businesses (such as Kronos’ TiO2 operations); |
