Olin Swings Toward Breakeven as Merger Costs and Plant Outage Bite
Olin posted a $13.3 million net loss in the second quarter as an unplanned Freeport plant shutdown cut adjusted EBITDA by $40 million.
Olin (OLN) narrowed its net loss to $13.3 million, or $0.12 a diluted share, in the second quarter of 2026, from an $83.0 million loss in the first quarter, even as an unplanned shutdown at its Freeport, Texas, vinyl chloride monomer plant cut quarterly adjusted EBITDA by $40 million.
The chemicals and ammunition maker's results arrived seven weeks after it agreed to merge with Huntsman in an all-stock deal, a transaction that is reshaping how Olin's quarterly numbers read. Acquisition-related costs of $10.6 million showed up for the first time in the quarter, tied to the pending combination, which is expected to close in the first half of 2027 and deliver more than $400 million in identified cost synergies.
Sales fell 1% year over year to $1,741.9 million from $1,758.3 million, while adjusted EBITDA of $191.3 million rose 8.6% from $176.1 million a year earlier and climbed sharply from $86.2 million in the first quarter. The sequential jump fell short of the $160-200 million range Olin had guided for the second quarter itself, a shortfall the company attributed to the Freeport outage.
The Chlor Alkali Products and Vinyls segment swung to $53.4 million in earnings from a $44.5 million loss in the first quarter, a turnaround of roughly $98 million, as higher caustic soda and ethylene dichloride pricing offset the $40.1 million Freeport hit. Segment earnings still trailed the $64.9 million posted a year earlier, and sales fell to $819.5 million from $979.5 million as the Blue Water Alliance trading joint venture wound down at the end of 2025.
Epoxy provided the sharpest turn in the quarter, posting $16.0 million in earnings against a $23.7 million loss a year ago, a swing of nearly $40 million, and extending an improvement from a $2.9 million loss in the first quarter. Sales rose 27% year over year to $422.1 million on higher volumes and pricing, even as European demand stayed weak. Winchester added a steadier gain, with earnings up to $28.1 million from $25.0 million a year earlier on stronger commercial ammunition pricing and military project revenue, though higher commodity metals costs weighed on the segment.
The balance sheet showed more strain than the operating results. Net debt climbed to $2,851.7 million at June 30 from $2,659.7 million at year-end 2025, while trailing-twelve-month adjusted EBITDA fell to $567.6 million from $651.8 million, pushing leverage to 5.0 times net debt to adjusted EBITDA from 4.1 times at year-end and 3.9 times a year earlier. Olin paid roughly $93 million in the first half of the year toward legacy Shintech litigation, with about $100 million more expected in the second half; unlike the first quarter, no litigation charge was added back to second-quarter adjusted EBITDA.
Olin reiterated third-quarter guidance of $160 million to $200 million in adjusted EBITDA, the same range it had set for the second quarter, but described a different mix of forces behind it. Reduced Freeport VCM rates and softer ethylene dichloride pricing are expected to offset stronger caustic soda volumes and seasonal strength at Winchester, a contrast to the broad-based sequential improvement Olin had anticipated across all segments when it issued the prior guide.
The company also flagged a $183.0 million increase in working capital during the first half, an above-normal seasonal build that it expects to unwind in the second half of 2026.