KNOT Offshore Partners (KNOP) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues were $96.8 million, operating income $15.6 million, net income $3.4 million, and adjusted EBITDA $57.6 million.

• Fleet utilization was 96.8% (92.4% overall after drydocking), with strong operational momentum in Brazil and the North Sea.

• Available liquidity at quarter end was $143.3 million, up $2.6 million from March 31, with $95.3 million in cash and $48 million undrawn credit.

• Declared a cash distribution of $0.075 per common unit, up from $0.05 in the prior quarter and $0.026 for several years before.

• Acquired Hedda Knutsen for a net cash cost of $24.4 million, expanding the fleet and reducing average vessel age, with the vessel on long-term charter to Petrobras.

Financial highlights

• Revenues rose to $96.8 million in Q2 2026 from $92.0 million in Q1 2026, driven by higher loss of hire recoveries and fewer off-hire days.

• Debt repayments continue at ~$95 million per year; average margin on floating rate debt was 2.21% over SOFR in Q2.

• Total assets as of June 30, 2026, were $1.64 billion; total liabilities $1.02 billion.

• Operating income increased to $15.6 million from $14.7 million sequentially, but decreased by $6.6 million year-over-year due to higher depreciation.

• Net income was $3.4 million, up from $2.6 million sequentially, but down from $6.8 million year-over-year.

Outlook and guidance

• Fully chartered for the remainder of 2026; 92% firm coverage for 2027 (96% with options), and 65% for 2028 (93% with options).

• $881.2 million in contracted forward revenue as of June 30, 2026, with average fixed charter duration of 2.5 years and options to extend by 4.0 years.

• Shuttle tanker demand in Brazil and the North Sea remains robust, with positive medium- and long-term market outlook.

• Expectation of gradual distribution increases supported by accretive drop-downs and improving charter market.