KNOT Offshore Partners (KNOP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues were $76.3 million, operating income was $17.2 million, net loss was $3.8 million, and adjusted EBITDA reached $45.1 million.

• Fleet utilization was 98.8% with no scheduled drydockings, and a cash distribution of $0.026 per common unit was paid in November 2024.

• The partnership executed a vessel swap, acquiring Tuva Knutsen and selling Dan Cisne, reducing fleet age and adding seven years of fixed charter revenue.

• Several new and extended charters were secured for Ingrid Knutsen, Hilda Knutsen, Torill Knutsen, and Carmen Knutsen, increasing backlog and earnings visibility.

• Dan Sabia is operating in the conventional market while being marketed for shuttle tanker deployment.

Financial highlights

• Q3 2024 revenues were $76.995 million, up from $74.42 million in Q2 2024; available liquidity at quarter-end was $77.2 million, including $67.2 million in cash and $10 million undrawn credit.

• Net loss for Q3 2024 was $3.773 million, compared to a net loss of $12.851 million in Q2 2024.

• Adjusted EBITDA for Q3 2024 was $45.1 million, with a margin of about 59%.

• Contracted revenue position stood at $980 million on fixed contracts, averaging 2.8 years in duration, with extension options averaging 2.4 years.

• Total interest-bearing obligations were $947.3 million as of September 30, 2024.

Outlook and guidance

• Shuttle tanker market is tightening, especially in Brazil due to new FPSOs and production volumes, while the North Sea market is expected to improve with new projects.

• Eleven newbuild shuttle tankers are expected for delivery over the next three years, all with long-term charters.

• The partnership aims to maintain high utilization, secure additional charters, and focus on liquidity and contract coverage.