KNOT Offshore Partners Stock Slips After Q3 Revenue Miss

KNOT Offshore Partners LP KNOP reported third-quarter revenue of $66.6 million, down 6.6% year-over-year, missing the consensus of $70.8 million.
The operating income was 21.13 million (-31.6% Y/Y), and the margin contracted to 31.7% compared to 43.3% a year ago.
Net income was $13.53 million compared to $25.08 million a year ago.
Distributable cash flow was $18.6 million, compared to $24 million for 2Q21.
Fleet operated with 91.9% utilization for scheduled operations.
Vessel operating expenses increased by 0.3 million to $17.7 million, from $17.4 million 2Q21.
Adjusted EBITDA decreased 11.5% Y/Y to $47.2 million, and margin contracted by 392 bps to 70.9%.
KNOT Offshore Reported $121.6 million in available liquidity, with cash and cash equivalents of $66.6 million as of September 30, 2021.
KNOT Offshore generated cash from operating activities year-to-date of $120.65 million, compared to $127.84 million a year ago.
Outlook: KNOT Offshore expects earnings for Q4 to be affected by the planned 5-year special survey drydocking of the Tordis Knutsen.
As of September 30, 2021, the company's fleet of seventeen vessels had an average age of 7.8 years and had charters with an average remaining fixed duration of 2.1 years. The Partnership had $592 million of remaining contracted forward revenue, excluding options.
Except for the Tordis Knutsen, KNOT Offshore's entire fleet is fully contracted for the remainder of 2021. Therefore the Partnership expects its distribution coverage ratio to remain strong for Q4.
Price Action: KNOP shares are trading lower by 2.24% at $17.92 on the last check Thursday.

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