Knot Offshore Partners Lp · NYSE:KNOP
Knot Offshore Partners Lp — Q2 2024 Earnings Presentation
23 slides from Knot Offshore Partners Lp's earnings presentation, Sep 4, 2024
Slide 1: 2Q 2024 Earnings Presentation
2Q 2024 September 4, 2024 (NYSE:KNOP)
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains certain forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) that reflect management’s current view and involve known and unknown risks and are based upon assumptions and estimates that are inh
Slide 3: 2Q 2024 and subsequent: financial headlines
2Q 2024 and subsequent: financial headlines ▪ 2Q 2024 financial headlines include: − Revenues: $74.4m − Operating income: $1.3m (or $17.7m when adjusting to remove vessel value impairment) − Net loss: $12.9m (or net income of $3.5m when adjusting to remove vessel value impairment) − Adjusted EDITDA:
Slide 4: Recent developments in Brazil
Recent developments in Brazil ▪ Carmen Knutsen ▪ in April 2024, a time charter was signed with an oil major commencing 1Q 2026 for 4 years fixed + 1 year’s option ▪ Dan Sabia ▪ was redelivered by Transpetro in July 2024, at completion of its extended bareboat charter ▪ Tordis Knutsen ▪ in August 202
Slide 5: Recent developments in the North Sea
Recent developments in the North Sea ▪ Ingrid Knutsen ▪ in April 2024 began operating on a time charter contract with Knutsen NYK at a reduced charter rate, prior to anticipated delivery to Eni in October 2024 on a time charter for 2 years fixed + 2x 1 year’s option ▪ Torill Knutsen ▪ in July 2024,
Slide 6: Dan Cisne sale / Tuva Knutsen purchase
Dan Cisne sale / Tuva Knutsen purchase ▪ On September 3, 2024, we: ▪ purchased the Tuva Knutsen from Knutsen NYK; and ▪ sold the Dan Cisne to Knutsen NYK ▪ Key terms ▪ Purchase price for the Tuva Knutsen was $97.5m less $68.6m of net outstanding debt ($69.0m gross debt less $0.4m of capitalized fina
Slide 7: 2Q 2024 and subsequent: outlook
2Q 2024 and subsequent: outlook ▪ Net-demand outlook remains positive − Faster pace of new offshore oil production implied by continuing FPSO ordering for shuttle tanker-serviced fields − Significant new offshore oil production volumes coming online − Supports shuttle tanker demand and charter rates
Slide 8: Income statement
Income statement Unaudited, USD thousands 2Q 2024 1Q 2024 2Q 2023 FY 2023 FY 2022 Time charter and bareboat revenues 73,437 73,362 69,924 277,084 262,797 Voyage revenues 351 2,715 1,585 8,849 4,689 Loss of hire insurance recoveries 78 - 1,424 2,840 758 Other income 554 555 891 1,943 341 Total revenu
Slide 9: Adjusted EBITDA
Adjusted EBITDA Unaudited, USD thousands 2Q 2024 1Q 2024 2Q 2023 FY 2023 FY 2022 Net income (loss) (12,851) 7,438 (40,390) (34,328) 58,667 Interest income (897) (828) (861) (3,468) (822) Interest expense 16,863 17,465 18,107 72,070 42,604 Depreciation 27,748 27,742 28,107 110,902 107,419 Impairment
Slide 10: Balance sheet
Balance sheet Unaudited, USD thousands At Jun 30, At Dec 31, At Jun 30, At Dec 31, 2024 2023 2024 2023 Current assets: Current liabilities: Cash and cash equivalents 56,619 63,921 Current portion of long-term debt 89,157 98,960 Inventories 3,717 3,696 Current lease liabilities 1,096 982 Amounts due
Slide 11: Long-term borrowings
Long-term borrowings Unaudited, USD thousands Original Outstanding at of which Balloon Vessels providing security at June 30, 2024 amount1 June 30, 2024 Current due at Instalments2 maturity3 1. Revolving credit facility with NTT due 25,0001 15,000 15,000 Unsecured August 2025 2. Loan due September 2
Slide 12: Forward contracted revenue backed by leading energy companies
Forward contracted revenue backed by leading energy companies 2Q 2024(1) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Shell InsurancePetroChina Shell Oil . major Windsor 15 . 18 20 Contracted period Equinor KNOT . Equinor Bodil * 10 . 15 . 18 Charterer’s option Transpetro (BBC) Transp
Slide 13: Forward contract coverage
Forward contract coverage1 Focus remains on growing utilisation and forward visibility 100% 80% 60% 40% 20% 0% Q3 2024 Q4 2024 Q1 2025 Q2 2025 %Fixed Contract %Charterer's Option %Available / Spot Market (1) This chart includes contract developments after June 30, 2024, up to the date of the Partner
Slide 14: Dropdown inventory held/ordered by Sponsor as at reporting date
Dropdown inventory held/ordered by Sponsor as at reporting date The acquisition by KNOP of any dropdown vessels in the future is subject to approval of the Partnership’s independent Conflicts Committee, as well as the board of directors of each of KNOP and Knutsen NYK. There can be no assurance that
Slide 15: Continued growth in oil production outlook in Brazil
Continued growth in oil production outlook in Brazil Source: Petrobras Strategic Plan 2024-2028, announcement on November 23, 2023 https://agencia.petrobras.com.br/en/institutional/petrobras-unveils-strategic-plan-2024-2028-featuring-investments-of-usd-102-billion-23-11-2023/ www.knotoffshorepartner
Slide 16: FPSO ordering and deliveries continuing at pace in Brazil
FPSO ordering and deliveries continuing at pace in Brazil Source: Petrobras Strategic Plan 2024-2028, announcement on November 23, 2023 https://agencia.petrobras.com.br/en/institutional/petrobras-unveils-strategic-plan-2024-2028-featuring-investments-of-usd-102-billion-23-11-2023/ www.knotoffshorepa
Slide 17: Petrobras' production starts in 2025
Petrobras’ production starts in 2025 Source: Petrobras Q1 2024 results webcast, available at https://www.investidorpetrobras.com.br/en/results-and-announcements/results-center/ www.knotoffshorepartners.com www.knotoffshorepartners.com 17
Slide 18: KNOP attributes – US investor considerations
KNOP attributes – US investor considerations ▪ US investors are directed to the Investors FAQs and US Tax Information sections of KNOP’s website: − https://www.knotoffshorepartners.com/investors/investor-faqs/ − https://www.knotoffshorepartners.com/investors/stock-info/us-tax- information/default.as
Slide 19: KNOP attributes – our investment case
KNOP attributes – our investment case ▪ We are a market leader in the operation of shuttle tankers and our Sponsor has more than 40 years’ experience and investment in this business. ▪ Specialist vessels are critical infrastructure with limited replacement risk required to deliver oil production fro
Slide 20: Summary and near-term priorities
Summary and near-term priorities 2Q 2024 & subsequent: ▪ Utilization − 98.8%, with no impact from scheduled drydockings ▪ Generated − Revenues: $74.4m − Operating income: $1.3m ($17.7m if adjusted to remove impairment) − Net loss: $12.9m (net income $3.5m if adjusted to remove impairment) − Adjusted
Slide 21: Questions
Questions www.knotoffshorepartners.com www.knotoffshorepartners.com 21
Slide 22: Appendix
Appendix www.knotoffshorepartners.com www.knotoffshorepartners.com 22
Slide 23: Appendix – Non-GAAP financial measures
Appendix – Non-GAAP financial measures Adjusted EBITDA Adjusted EBITDA refers to earnings before interest, depreciation, taxes, impairments and other financial items (including other finance expenses, realised and unrealised gain (loss) on derivative instruments and net gain (loss) on foreign curren
KNOT Offshore Partners — Q2 2024 Earnings Presentation on 6ix