Q2 2024 Knot Offshore Partners LP Earnings Call Transcript
Key Points
- KNOT Offshore Partners LP (KNOP) achieved a high vessel utilization rate of 98.8% during Q2 2024.
- The company declared a cash distribution of $0.026 per common unit, paid in early August.
- The acquisition of Tuva Knutsen, which comes with a long-term contract with TotalEnergies, enhances fleet growth without requiring new funding.
- KNOP has a strong contracted revenue position of $773 million on fixed contracts, averaging 2.3 years in duration.
- The company successfully reduced its liabilities by $68 million in the first half of 2024, reflecting strong debt service capacity.
- KNOP reported a net loss of $12.9 million for Q2 2024, primarily due to vessel impairments.
- Operating income was significantly impacted, standing at only $1.3 million when including vessel impairments.
- The company faces near-term market conditions that require focused marketing efforts for vessels like Dan Sabia and Hilda Knutsen.
- There is a $91 million debt repayment due over the next 12 months, which could strain liquidity.
- The North Sea market is lagging behind Brazil in terms of FPSO deployment, potentially affecting vessel utilization rates.
Good morning, everyone. Welcome to KNOP second-quarter 2024 earnings call. My name is [Kiki] and I will be your conference operator today. (Operator Instructions) I will now hand you over to your host, Derek Lowe, Chief Executive Officer and Chief Financial Officer, Derek, please go ahead.
Thank you, Kiki, and good morning, ladies and gentlemen. My name is Derek Lowe, and I'm the Chief Executive and Chief Financial Officer of Knot Offshore Partners. Welcome to the partnership's earnings call for the second quarter of 2024. Our website is knotoffshorepartners.com, and you can find the earnings release there along with this presentation.
On slide 2, you will find guidance on the inclusion of forward-looking statements in today's presentation. These are made in good faith and reflect management's current views known and unknown risks and are based on assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control.
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