KNOT Offshore Partners (KNOP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $76.3 million, with operating income of $17.2 million, a net loss of $3.8 million, and Adjusted EBITDA of $45.1 million; fleet utilization was 98.8% with no scheduled drydockings.

• Nearly 96% charter coverage secured for 2024, with new contracts and extensions signed post-quarter, increasing backlog and earnings visibility.

• A vessel swap was completed: Dan Cisne sold and Tuva Knutsen acquired, reducing fleet age and adding seven years of fixed charter revenue.

• Cash distribution of $0.026 per common unit was declared and paid in November 2024.

• Torill Knutsen's repair was completed and insurance compensation is expected.

Financial highlights

• Q3 2024 revenues were $76.995 million, up from $74.42 million in Q2 2024 and $72.683 million in Q3 2023.

• Available liquidity at September 30, 2024, was $77.2 million, including $67.2 million in cash and $10 million undrawn credit.

• $980 million in contracted forward revenue at September 30, 2024, with average fixed charter duration of 2.8 years and 2.4 years of extension options.

• Total interest-bearing obligations were $947.3 million as of September 30, 2024; $96 million in current debt installments due over the next 12 months.

• Current ratio at September 30, 2024: current assets $91.8 million vs. current liabilities $209.9 million.

Outlook and guidance

• Shuttle tanker market is tightening, especially in Brazil, with strong FPSO ordering and new production; North Sea market remains subdued but is expected to improve.

• Projected shortage of shuttle tanker capacity in coming years, with newbuilds expected.

• Focus remains on maintaining high utilization, securing additional charters, and building liquidity.