KNOT Offshore Partners LP(US:KNOP)2025-12-04 21:20Financial Performance - KNOT Offshore Partners LP generated total revenues of $96.9 million, operating income of $30.7 million, and net income of $15.1 million for Q3 2025[4]. - Adjusted EBITDA for Q3 2025 was reported at $61.6 million, with a fleet utilization rate of 99.87% for scheduled operations and 96.49% including drydocking[4][6]. - The Partnership's total revenues for Q3 2025 were $96.867 million, an increase from $87.060 million in Q2 2025[31]. - Net income for Q3 2025 was $15.114 million, compared to $6.810 million in Q2 2025[31]. - The Partnership's operating income for Q3 2025 was $30.663 million, up from $22.184 million in Q2 2025[31]. - Net income for the nine months ended September 30, 2025, was $29,505 thousand, a significant recovery from a net loss of $9,185 thousand in the same period of 2024[39]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $165,359, an increase from $138,025 in the same period of 2024[42]. - EBITDA for the three months ended September 30, 2025, was $61,745, up from $40,404 in the same period of 2024[42]. Liquidity and Debt - The partnership had $125.2 million in available liquidity as of September 30, 2025, consisting of $77.2 million in cash and cash equivalents and $48 million in undrawn revolving credit facility capacity[4][13]. - The average margin paid on outstanding debt during Q3 2025 was approximately 2.22% over SOFR, with total interest-bearing obligations of $986.5 million[14]. - The partnership's net exposure to floating interest rate fluctuations was approximately $278.8 million as of September 30, 2025[15]. - The new $71.1 million senior secured term loan facility with MUFG Bank has a maturity date in October 2030, with an outstanding amount of $48.6 million expected at that time[19]. - The refinancing of a $25 million revolving credit facility with SBI Shinsei Bank will mature in November 2027, with an interest rate of SOFR plus a margin of 2.18%[20]. - Interest expense for the nine months ended September 30, 2025, was $46,702, down from $51,185 in the same period of 2024[42]. - Long-term debt stood at $657,543 thousand as of September 30, 2025, compared to $648,075 thousand at December 31, 2024, indicating a slight increase of 1.4%[37]. Asset Management - Total assets increased to $1,722,489 thousand as of September 30, 2025, up from $1,572,165 thousand at December 31, 2024, representing a growth of 9.5%[37]. - The total partners' capital increased to $546,887 thousand as of September 30, 2025, up from $526,827 thousand at December 31, 2024, showing a growth of 3.8%[37]. - Cash and cash equivalents rose to $77,207 thousand at the end of the period, compared to $66,933 thousand at the beginning of the period, marking an increase of 18.5%[39]. - Current liabilities increased to $367,742 thousand as of September 30, 2025, from $287,122 thousand at December 31, 2024, reflecting a rise of 28.1%[37]. Operational Highlights - Charter coverage for Q4 2025 is now secured at 100%, with approximately 93% coverage for 2026[7]. - The demand for shuttle tankers in Brazil is tightening due to a significant pipeline of new production growth and a limited newbuild order book[24]. - The average age of the Partnership's fleet is 10.0 years, with an average remaining fixed duration of charters at 2.64 years[24]. - The company reported a total realized gain on derivative instruments of $376 thousand for the three months ended September 30, 2025, compared to a loss of $370 thousand in the previous quarter[35]. Strategic Initiatives - The acquisition of the Daqing Knutsen for $95 million was completed on July 2, 2025, with a guaranteed hire rate until 2032[4][11]. - The partnership realized net proceeds of approximately $32 million from the sale and leaseback of the Tove Knutsen, with a gross sale price of $100 million[18]. - The company anticipates growth strategies that may include entering long-term charters of five years or more[45]. - The company is focused on maintaining long-term relationships with major users of shuttle tonnage[46]. - The company is exploring opportunities for profitable operations in the shuttle tanker and general tanker industries[45]. - The company is assessing the impact of supply chain disruptions and inflation on its operations[46]. - The company is evaluating its ability to refinance its indebtedness on acceptable terms and to access debt and equity markets[45]. Shareholder Actions - The partnership repurchased 384,739 common units for a total cost of $3.03 million at an average price of $7.87 per unit as part of a $10 million buyback program[4]. - The KNOT Offer proposes to acquire all publicly held common units at $10 per unit, currently under evaluation by the Conflicts Committee of the Board[5][11].