KNOP reports higher revenues

Nov 10 2017


KNOT Offshore Partners has reported total revenues of $58.2 mill for the three months ended 30th September, 2017, compared to $54.4 mill for the second quarter of this year.

The increase was mainly due to a full quarter of earnings from the ‘Vigdis Knutsen’, as she was included in the results of operations from 1st June, 2017. Lower fleet utilisation for the third quarter, compared to second quarter, was offset by one additional calendar day during 3Q17.

Vessel operating expenses for 3Q17 were $11.8 mill, an increase of $2.4 mill from $9.4 mill in 2Q17. The increase was also due to the ‘Vigdis Knutsen’ being included in operations and higher operating expenses, mainly due to the strengthening of the Norwegian Kroner (NOK) against the US dollar, compared to the second quarter.

The second quarter was affected by the receipt of insurance proceeds related to the technical default with the ‘Raquel Knutsen’.

As a result, operating income for 3Q17 was $26.7 mill, compared to $26.1 mill in 2Q17. Net income was $21.1 mill, compared to $16.9 mill for 2Q17. The net income also increased by $1.7 mill from $19.4 mill recorded for 3Q16.

Operating income for 3Q17 increased by $5.6 mill, compared to 3Q16, mainly due to increased earnings from ‘Raquel Knutsen’, ‘Tordis Knutsen’ and ‘Vigdis Knutsen’ being included in the Partnership’s operational results from 1st December, 2016, 1st March, 2017 and 1st June, 2017, respectively.

‘Carmen Knutsen’ went offhire on 26th September, 2017 for the mobilisation trip to Navantia Cadiz shipyard in Spain in order to complete her planned five-year special survey drydocking and certain repairs. She arrived in the yard on 12th October, 2017 and is estimated to be back on charter with Repsol by mid-December, 2017.

There were also 3.9 days of offhire in 3Q17 for damage repairs sustained by the ‘Tordis Knutsen’.

On 30th August, 2017, the Partnership entered into an unsecured revolving credit facility of $25 mill with NTT Finance Corp. This facility will mature in August, 2019, bear interest at LIBOR plus a margin of 1.8% and have a commitment fee of 0.5% on the undrawn portion of the facility.

As of 30th September, 2017, the Partnership had $50.1 mill in available liquidity, which consisted of cash and cash equivalents of $38.1 mill and $12 mill of capacity under its revolving credit facilities. The revolving credit facilities mature in June and August, 2019.

The Partnership’s total interest-bearing debt outstanding at the end of the period was $1,009.2 mill. 

On 29th September, 2017, the Partnership’s wholly owned subsidiary, KNOT Shuttle Tankers, acquired KNOT Shuttle Tankers 26, the company that owns the shuttle tanker, ‘Lena Knutsen’, from Knutsen NYK.

The purchase price was $142 mill, less about $133.8 mill of outstanding debt related to the ‘Lena Knutsen’, plus around $24.1 mill for a receivable owed by Knutsen NYK to KNOT 26 and about $1 mill for certain capitalised fees related to the vessel’s financing.

On the closing of the acquisition, KNOT 26 repaid around $41.9 mill of the debt, leaving an aggregate of about $91.9 mill of debt outstanding under the secured credit facility related to the vessel.

‘Lena Knutsen’ was delivered in June, 2017 and is operating in Brazil under a five-year timecharter with a subsidiary of Shell, which will expire in the third quarter of 2022. The charterer has options to extend for a further two five-year periods.

The Partnership’s earnings for 4Q17 will be affected by the planned drydocking and repair of the ‘Carmen Knutsen’, which is expected to be offhire for 73-75 days until mid-December, 2017.

On 5th July, 2017, Knutsen NYK acquired from Chevron the ‘Brasil Voyager’, a DP2 Suezmax class shuttle tanker built in 2013, which has been renamed ‘Brasil Knutsen’. In October, Knutsen NYK agreed to enter into a five-year charter for the vessel with Galp Sinopec, with options to extend the charter for up to two three-year periods.

‘Brasil Knutsen’ is expected to commence operations under the charter in Brazil by the end of this month. Knutsen NYK expects to offer the Partnership the opportunity to acquire the vessel after commencement of its charter.

 



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