Commenting on the second quarter results, Patrick S. Williams, President and Chief Executive Officer, said,
“This was a strong quarter for Innospec with all businesses contributing to double digit operating income growth.
Performance Chemicals operating leverage drove a 15 percent operating income increase over last year. In North Carolina we continue to advance our plant repairs, process improvements and upgrades to meet customer requirements. In parallel, we continue to execute on a range of other topline and margin opportunities identified in the business. We expect these combined efforts to drive further improvement in the second half of 2026.
Fuel Specialties had another strong quarter delivering revenue and operating income growth with margins that remained within our target range. As expected, the business continued to deliver consistently as our team advances on a broad set of regional and end-market opportunities in traditional fuel, renewable fuel and non-fuel applications.
Oilfield Services operating income and margins improved sequentially and on the prior year, driven by our recent DRA plant expansion and growing opportunities to deliver this industry-leading technology to our customers. In addition, we remain focused on driving growth and margin improvement in our US and Middle East completions and production business. We are confident that these combined efforts will drive further sequential improvement in the second half of 2026.”
Revenues in Performance Chemicals of $190.3 million were up 9 percent from $173.8 million in the second quarter of last year. Volume reductions of 2 percent were offset by a positive price/mix of 8 percent and a positive currency impact of 3 percent. Gross margins of 17.3 percent decreased by 0.2 percentage points from the same quarter last year. Operating income of $16.4 million increased 15 percent from $14.3 million in the corresponding prior year period.
Revenues in Fuel Specialties of $185.7 million were up 12 percent from $165.1 million in the second quarter of last year. Volumes were up 7 percent with price/mix up 3 percent and a positive currency impact of 2 percent. Gross margins of 36.6 percent decreased by 1.5 percentage points over last year. Operating income of $36.3 million increased 3 percent from $35.4 million a year ago.
Revenues in Oilfield Services of $115.4 million for the quarter were up 14 percent from $100.8 million in the second quarter of last year. Gross margins of 32.3 percent increased by 2.7 percentage points from the same quarter last year. Operating income of $8.7 million increased 40 percent from $6.2 million in the prior year period.
Corporate costs for the quarter were $21.6 million compared with $20.9 million a year ago.
The effective tax rate for the quarter was 25.0 percent compared to 26.0 percent in the same period last year, reflecting the geographical location of taxable profits.
For the quarter, cash provided by operating activities was $7.2 million compared to $10.5 million a year ago. As of June 30, 2026, Innospec had $250.2 million in cash and cash equivalents and no debt.
Mr. Williams concluded,
“This was a strong quarter for Innospec driven by improved performance in all our businesses. We remain focused on further technology development, topline growth and margin improvement opportunities, and we are optimistic about the impact that these actions will have on future results.
Operating cash generation was positive in the quarter, and our net cash position closed at over $250 million. We expect increased operating cash flow in the second half as we improve working capital efficiency. We continue to have significant balance sheet flexibility for organic investment, M&A, dividend growth, and buybacks. This quarter we continued our record of returning value to shareholders with our semi-annual dividend of 92 cents per share and $6.4 million in share repurchases.”
