KNOT Offshore Partners (KNOP) Q4 2023 earnings summary

Executive summary

• Q4 2023 revenue was $73.0m, operating income $18.1m, net loss $5.3m and Adjusted EBITDA $45.7m; the net loss included an $8.9m unrealized derivative loss.

• Fleet utilization was 99.6% for scheduled operations and 96.0% including scheduled drydockings.

Financial highlights

• Q4 revenue was $73.0m versus $72.7m in Q3; operating income was $18.1m versus $20.6m, and net loss was $5.3m versus net income of $12.6m.

• Q4 net loss of $5.3m compared with net income of $6.0m in Q4 2022; operating income fell $1.5m year over year.

• FY 2023 revenue was $290.7m, operating income $25.1m and net loss $34.3m; FY 2022 revenue was $268.6m, operating income $66.2m and net income $58.7m.

• FY 2023 Adjusted EBITDA was $185.7m versus $173.6m in FY 2022; Q4 Adjusted EBITDA was $45.7m versus $47.4m in Q4 2022.

• Q4 vessel operating expenses rose to $25.5m from $23.2m in Q3, mainly on higher supplies, equipment and repair costs; interest expense was $18.1m versus $18.5m.

Outlook and guidance

• Fixed contracts cover 79% of 2024 charter days, rising to 91% if charterer options are exercised; remaining charter gaps are being marketed.

• Forward contracted revenue was $699m at Dec. 31, 2023, excluding charterer options and contracts agreed or signed after year-end; remaining firm charters averaged 2.0 years, plus 2.1 years of options.

• Near-term priorities include additional charter coverage, especially for Hilda Knutsen, Torill Knutsen, Dan Cisne and Dan Sabia, and rebuilding liquidity and earnings visibility.

• The medium- and long-term shuttle tanker outlook was viewed as favorable; cash generation was expected to support operations and scheduled debt repayments.