The following is a summary of the KNOT Offshore Partners LP (KNOP) Q2 2024 Earnings Call Transcript:

Financial Performance:

• KNOP reported Q2 2024 revenues of $74.4 million, with an operating income of $1.3 million.

• Adjusted EBITDA stood at $45.5 million.

• The company reported a net loss of $12.9 million mainly due to vessel impairments.

• Excluding impairments, the net income would have been $3.5 million.

• KNOP declared a cash distribution of $0.026 per common unit in early August.

• The company closed Q2 with a liquidity of $66 million, comprising $56 million in cash and cash equivalents and $10 million in undrawn capacity on credit facilities.

Business Progress:

• KNOP recently added the Tuva Knutsen to its fleet, enhancing its contractual footprint.

• The company extended its contracts with Shell for Tordis and Lena Knutsen vessels by one year, with options for three more years, securing operations until Q3 of 2028.

• The company successfully swapped Dan Cisne for Tuva Knutsen, improving the average fleet age and focusing on high demand segments.

• KNOP remains operationally efficient with an average vessel age of 10.2 years and a strong debt service capacity.

• Contracts secured offer a strong revenue baseline of $773 million with an average duration of 2.3 years, plus additional options averaging a further 2.3 years.

Opportunities:

• The FPSO market in Brazil is robust, indicating strong current and future demands for shuttle tankers.

• Newbuild contracts for shuttle tankers, including those due for delivery to Knutsen NYK in the future with 10-year contracts, support confidence in market growth.

Risks:

• Potential near-term challenges in finding employment for uncontracted vessels like Dan Sabia and Hilda Knutsen in a competitive market.

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