- Strong Financial Performance: Q3 2025 reported $96.9M revenue, $30.6M operating income, $15.1M net income, and $61.6M adjusted EBITDA.
- Liquidity Position: $125.2M available liquidity, including $77.2M cash and $48M undrawn credit facilities as of September 30, 2025.
- Strategic Asset Acquisition: Purchased Daqing Knutsen from KNOT with a 7-year higher-rate guarantee, enhancing long-term revenue stability.
- Shareholder Value Initiatives: Completed $3M buyback of 385K common units and $32M capital raise via Tove Knutsen sale-and-leaseback.
- Charter Contract Securitization: Extended charters with Shell and Equinor, and maintained $963M fixed-contract backlog averaging 2.6 years.
Liquidity and Capital Structure
As of September 30, 2025, KNOP had $125.2 million in available liquidity, comprising $77.2 million in cash and $48 million in undrawn credit facilities. The company continued to optimize its capital structure through strategic refinancings, including a $25 million revolving credit facility with NTT and a sale and leaseback for the Tove Knutsen, which increased capital by $32 million.
Operational Highlights and Market Outlook
The shuttle tanker market has been tightening in Brazil and the North Sea, driven by FPSO start-ups and ramp-ups. KNOP secured charter extensions with major clients like Shell and Equinor, demonstrating its strong market position. The company's fleet of 19 vessels is well-positioned to capitalize on the improving market conditions.
Valuation and Growth Prospects
With a P/E Ratio of 10.86 and an EV/EBITDA of 5.86, KNOP's valuation appears reasonable given its growth prospects. Analysts estimate next year's revenue growth at 1.9%. The company's ability to maintain its G&A expenses around $1.6 million per quarter is expected to support its profitability. The current dividend yield of 0.97% adds to the attractiveness of the stock.
Strategic Developments
KNOP received an unsolicited offer from its sponsor, KNOT, to buy publicly owned common units for $10 per unit. The Conflicts Committee is evaluating this offer, with a potential definitive agreement requiring a proxy and unitholder vote, likely in the first quarter. Additionally, KNOP established a buyback program, purchasing nearly 385,000 common units at an average price of $7.87 per unit, indicating confidence in its valuation.