KNOT Offshore Partners LP(US:KNOP)2025-09-29 13:18Financial Performance - Operating revenues for Q2 2025 reached $87.06 million, a 17% increase from $74.42 million in Q2 2024[6] - Net income for the first half of 2025 was $14.39 million, compared to a net loss of $5.41 million in the same period of 2024[9] - The company reported an operating income of $22.18 million for Q2 2025, significantly up from $1.33 million in Q2 2024[6] - For the six months ended June 30, 2025, the net income was $14,391, compared to a net loss of $5,413 for the same period in 2024, indicating a significant turnaround[19] - For the three months ended June 30, 2025, the net income was $6.81 million, compared to a net loss of $12.85 million for the same period in 2024[115] - Net income for the three months ended June 30, 2025, was $6.8 million, a significant improvement of $19.7 million compared to a net loss of $12.9 million for the same period in 2024[190] Expenses and Liabilities - Total operating expenses decreased to $126.81 million in the first half of 2025, down from $130.02 million in the first half of 2024[6] - Total current liabilities decreased to $219.11 million as of June 30, 2025, from $287.12 million at the end of 2024[12] - Interest expense for Q2 2025 was $14.72 million, down from $16.32 million in Q2 2024, representing a decrease of 9.8%[50] - Total interest expense for the first half of 2025 was $30.22 million, a reduction of 12.3% compared to $34.33 million in the same period of 2024[50] - The Partnership's total other finance expense for the first half of 2025 was $351, compared to $92 in the same period of 2024[51] Assets and Cash Flow - Cash and cash equivalents as of June 30, 2025, were $66.32 million, slightly down from $66.93 million at the end of 2024[12] - Total assets increased to $1.62 billion as of June 30, 2025, compared to $1.57 billion at the end of 2024[12] - The partnership's net cash provided by operating activities for the six months ended June 30, 2025, was $67,980, compared to $60,572 for the same period in 2024, showing an increase of approximately 12.4%[19] - The partnership's cash and cash equivalents at the end of the period were $66,322, compared to $56,619 at the end of June 30, 2024, representing an increase of approximately 17.5%[19] Debt and Financing - Long-term debt rose to $735.45 million as of June 30, 2025, up from $648.08 million at the end of 2024[12] - The carrying amount of long-term debt as of June 30, 2025, was $918.59 million, compared to $909.65 million as of December 31, 2024[64] - The Partnership's long-term debt repayment schedule includes a total of $918.6 million, with significant repayments due in 2026 amounting to $373.7 million[84] - The Live Facility, which became a debt obligation upon the acquisition of Live Knutsen, has an outstanding amount of $73.4 million as of March 3, 2025, and bears interest at SOFR plus a margin of 2.01%[85][88] Acquisitions and Fleet - The acquisition of the Daqing Knutsen was completed on July 2, 2025, which will be accounted for as an asset acquisition and included in consolidated operations from that date[23] - The Partnership acquired KNOT's 100% interest in KNOT Shuttle Tankers 27 AS on March 3, 2025, as part of its market expansion strategy[78] - The Partnership acquired the Live Knutsen for a purchase price of $100 million, netting an initial cost of approximately $26.6 million after accounting for outstanding indebtedness and capitalized fees[172] - The Partnership's fleet consisted of eighteen shuttle tankers as of June 30, 2025, with charter contracts expiring between 2026 and 2031[22] Revenue and Contracts - Time charter revenues for the three months ended June 30, 2025, were $85,920,000, up 20.8% from $71,075,000 in 2024[39] - Minimum contractual future revenues from time charters and bareboat charters total $895,203,000, with $178,012,000 expected in 2025[39] - Time charter and bareboat revenues increased by $12.5 million to $85.9 million for the three months ended June 30, 2025, compared to $73.4 million for the same period in 2024, primarily due to the inclusion of the Tuva Knutsen and Live Knutsen in the fleet[190] Tax and Valuation - The effective tax rate for the three months ended June 30, 2025, is -2%, compared to 2% for the same period in 2024[73] - The Partnership recognized a valuation allowance against deferred tax assets of $3.0 million as of June 30, 2025, down from $3.2 million as of December 31, 2024[72] Other Financial Metrics - The Partnership's total assets pledged as security for long-term debt and interest rate swap obligations amounted to $1.513 billion as of June 30, 2025, up from $1.462 billion at December 31, 2024[110] - The total notional amount of outstanding interest rate swap contracts as of June 30, 2025, was $421.2 million, up from $417.9 million at the end of 2024[59] - The Partnership's interest rate swap contracts had a net asset value of $6.2 million as of June 30, 2025, down from $13.3 million at the end of 2024[59] Shareholder Returns - The Partnership reported cash distributions declared and paid per unit of $0.03 for the three months ended June 30, 2025, consistent with the same period in 2024[115] - The Partnership authorized a common unit repurchase program of up to $10 million over the next 12 months[146] - As of September 29, 2025, the Partnership repurchased 226,374 common units at an average price of $7.24 per unit, totaling $1.64 million[148]