Financial Performance - KNOT Offshore Partners generated total revenues of 76.3 million in Q3 2024, driven by higher charter revenues and insurance proceeds of 23.3 million in Q4 2024, a significant increase from a net loss of 28.6 million compared to a net loss of 63.1 million, reflecting strong operational performance and increased fleet utilization at 98.3%[4][11]. - For the year ended December 31, 2024, total revenues reached 290.7 million in 2023[28]. - Time charter and bareboat revenues amounted to 277.1 million in 2023, reflecting a growth of 10.7%[28]. - The operating income for the year was 25.1 million reported in 2023, marking a year-over-year increase of 189.5%[28]. - Net income for 2024 was 34.3 million in 2023, indicating a substantial turnaround[28]. - Adjusted EBITDA for the year ended December 31, 2024 was 185,687 thousand for the year ended December 31, 2023, reflecting a growth of approximately 8.5%[38]. Liquidity and Debt - As of December 31, 2024, the Partnership had 66.9 million in cash and cash equivalents and 909.7 million as of December 31, 2024, with an average margin of approximately 2.25% over SOFR[13]. - Current liabilities increased significantly from 287,122 thousand at December 31, 2024, an increase of approximately 125%[33]. - Long-term debt decreased from 648,075 thousand at December 31, 2024, a reduction of approximately 24.4%[33]. - The current portion of long-term debt rose significantly from 256,659 thousand at December 31, 2024, an increase of approximately 159%[33]. - Cash and cash equivalents at the end of the period increased to 63,921 thousand at the end of the previous year, a rise of about 4.7%[35]. Operational Highlights - The Partnership secured over 94% of charter coverage for the remainder of 2025 and approximately 75% for 2026, indicating strong demand in the market[6]. - The average remaining fixed duration of charters was 2.4 years, with an additional average extension option of 4.8 years[19]. - The Partnership's fleet had an average age of 9.6 years as of December 31, 2024, with ongoing investments in fleet expansion and modernization[19]. - The company has entered into multiple long-term time charter contracts, including a ten-year contract with Petrobras for three new vessels expected to be delivered between 2026 and 2027[24]. - The company has options for charter extensions on several contracts, providing potential for future revenue growth[24]. Market Conditions - The market for shuttle tankers in Brazil is tightening, driven by robust demand and a limited newbuild order book, with a significant pipeline of new production growth expected[19][21]. - The company is monitoring market trends in the shuttle tanker industry, including hire rates and supply-demand factors[41]. Strategic Focus - The Partnership plans to pursue long-term visibility from charter contracts and build liquidity to support sustainable cash flow generation[22]. - KNOT Offshore Partners is focused on maintaining long-term relationships with major users of shuttle tonnage to enhance operational stability[42]. - The company is committed to complying with governmental regulations, including climate change regulations, which may affect operational costs[42]. - KNOT Offshore Partners aims to maximize the utilization of its vessels, including redeployment or disposition of vessels no longer under charter[42]. - The company is evaluating the financial condition of existing and future customers to ensure they can fulfill charter obligations[42]. - KNOT Offshore Partners is preparing for potential disruptions in shipping routes due to various risks, including political events and piracy[44]. - The company is aware of the increasing emphasis on climate, environmental, and safety concerns from its customers[42]. - KNOT Offshore Partners is assessing the impacts of geopolitical events, including the Russian war with Ukraine and conflicts in the Middle East, on its operations[42]. - The company anticipates future capital expenditures and the availability of capital resources to fund these expenditures[42]. Other Financial Metrics - The total operating expenses for 2024 were 265.6 million in 2023[28]. - The weighted average units outstanding remained stable at 34,045 thousand common units throughout 2024[28]. - The company reported a realized gain on derivative instruments of 5.4 million in 2023[31]. - The company recognized an impairment of 49,649 thousand in the previous year, indicating improved asset performance[35]. - The total partners' capital increased from 526,827 thousand at December 31, 2024, a slight increase of about 0.5%[34]. - The partnership plans to host a conference call on March 20, 2025, to discuss Q4 2024 results, inviting all unitholders and interested parties[27].
KNOT Offshore Partners LP(KNOP) - 2024 Q4 - Annual Report