KNOT Offshore Partners (KNOP) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenues reached $91.3 million, operating income was $34.7 million, net income $23.3 million, and Adjusted EBITDA $63.1 million, with $5.9 million in insurance proceeds included.

• Fleet utilization was 98.3% in Q4 2024, with no planned dry docking impacting operations.

• Over 94% of 2025 and approximately 75% of 2026 charter coverage secured, supported by new contracts and extensions.

• Fleet optimization included vessel swaps, such as the sale of Dan Sabia and acquisition of Lena Knutsen/Live Knutsen, reducing average fleet age and increasing long-term contract pipeline.

• Cash distribution of $0.026 per common unit declared and paid in early February 2025.

Financial highlights

• Q4 2024 revenues were $91.3 million, up from $76.3 million in Q3 2024, with operating income of $34.7 million and net income of $23.3 million.

• Adjusted EBITDA for Q4 2024 was $63.1 million, with a margin of approximately 69%.

• Available liquidity at year-end was $90.4 million, with $66.9 million in cash and $23.5 million in undrawn credit.

• Total interest-bearing obligations stood at $909.7 million as of December 31, 2024; net debt was $837.8 million.

• Debt repayments are approximately $90 million per year, with $93 million in current debt installments due in 2025.

Outlook and guidance

• Over 94% of 2025 and 75% of 2026 charter coverage is fixed, with $870 million in contracted forward revenue as of December 31, 2024.

• Shuttle tanker market is tightening, especially in Brazil due to new FPSOs and limited newbuild supply; North Sea demand is expected to improve with new field startups.

• Management anticipates shuttle tanker demand growth to outpace supply, supporting expectations for charter option exercises.

• Four vessels are scheduled for dry docking in 2024, with minimal operational impact expected.

• Focus remains on safe operations, high utilization, and securing additional charter coverage.